Accounting Multiple Choice Question – 20 December 2023

What does the term ‘nominal value of a share’ refer to?

Select ONE answer:

1. The value that a share is sold by one shareholder to another shareholder for
2. The price at which a company issues shares to raise money for use within the company
3. A value chosen by the company when it was set up which is used to value the shares in the Statement of Financial Position
4. The same value as the average selling price of the goods that the company sells

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – The nominal price of a share exists so that the shares can be valued in the SOFP. The nominal value of the shares is chosen when the company is set up.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.