If the issuing company has only one class of share capital, a transfer from retained earnings to contributed capital equal to the market value of the shares issued is ordinarily a characteristic of: A. A bonus issue but not a share split B. Neither a bonus issue nor a share split C. Either a bonus issue or a share split D. A share split but not a bonus issue
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If the issuing company has only one class of share capital, a transfer from
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- When the selling price of treasury shares is greater than its cost, the company credits the difference to a.Gain on Sale of Treasury Shares. b.Share Premium–Treasury. c.Treasury Shares. d.Share Premium–Ordinary.When a small, share capital dividend is declared, Retained Earnings is debited for the a. par value of the share capitalb. fair market value of the share capital on the date of recordc. fair market value of the share capital on the date of declarationd. fair market value of the share capital on the date of distributionHow would a share split affect the amount of total share capital, total shareholder's equity and retained earnings, respectively No effect ;No effect ;No effect Increase;Increase;No effect No effect;No effect;Increase Decrease;Decrease;Decrease
- Which of the following does not affect accumulated profits? A. Stock dividendB. Share splitC. Conversion of preference share to ordinary shareD. Treasury share transactionHow would the declaration and subsequent issuance of a small stock dividend affect share capital and share premium when the fair value of the shares is equal to the par value? No effect on share capital and increase share premium Increase share capital and no effect on share premium Increase both share capital and share premium No effect on both share capital and share premium.Sale of treasury shares at less than cost shall be charged to * a. Loss on sale of treasury shares to be reported as other expense b. Retained earnings and then additional paid in capital from treasury share transactions c. Additional paid in capital from treasury share transactions and then retained earnings d. Share premium from original issuance, additional paid in capital from treasury share transactions and then retained earnings
- Which of the following statements correctly relate to ordinary shares? i) They represent an ownership interest.ii) Ordinary equity holders are the first to have their claims met in the event of the company going into administration.iii) As dividends are the return to the shareholders, they are paid out of operating profits before tax.iv) Control rights often differ between ordinary and other classes of share.It is not unusual for some company investments to carry cumulative dividend rights. Which of the following statements about the declaration of cumulative dividends is correct? A. They are paid when profits are available for that purpose B. They are paid out of capital C. They are paid in the form of a bonus issue D. They are not paid until profits reach a certain percentageWhen non-par value shares are reacquired at a cost greater than their average issue price and cancelled, what account(s) should be debited? Select one: a. The share account for the total cost. b. The share account for the average issue price, contributed surplus-repurchases up to its account balance, other contributed surplus relating to this class of shares in proportion to the number of shares repurchased versus outstanding and lastly retained earnings for any remaining amount. c. The share account for the average per share amount, retained earnings for the additional amount, and lastly contributed surplus for any remaining amount. d. The share account for the average per share amount and a loss account for the additional amount. e. none of the above answers are correct.
- Transaction costs incurred by the corporation relating to issue of shares may not be a. Charged against the related share premium b. Charged to an expense account c. Written off directly against share capital d. Taken to profit or lossMatching Type. Choose the correct answer in the box provided. These are distributions of the earnings of the corporation in the form of the corporation's own shares. * It is the procedure of restating assets, liabilities and share capital balances at its fair value for the purpose of eliminating deficit. * Share option is the best example of this kind of share-based compensation plan. * The date the liability for dividends must be recognized *rdinary share capitalOrdinary share capitalWhich of the following items would not form part of the shareholders' equity of a company on the statement of financial position? Select one: a. Retained profits b. Trade payables c. Share premium d. Ordinary share capital