Exam 2: Owners Equity: Share Capital and Reserves

The balance in the retained earnings account is affected by the transfer to that account of: I Issued share capital II Dividends paid or provided for III Transfers to or from other reserve accounts IV Changes in accounting policies and errors

In respect to the issue of shares by a company, what is an IPO?

The appropriate account to record any excess proceeds received and retained (not refunded) by a company from an oversubscription to a share offer application, is the:

IAS 1 Presentation of Financial Statements requires the following items to appear on the face of the Statement of Changes in Equity I The net amount of cash from the issue of any securities during the period II The cumulative effect of changes in accounting policy and the correction of errors III Each item of income or expenses that are required to be recognised directly in equity IV Profit or loss for the period.

Retained earnings are a component of

The bonus issue of shares has the following impact on the equity of a company;

IAS 1 requires that information in relation to dividends paid or declared during the year be disclosed in:

Whether a dividend is paid by a company depends on the decisions made by the:

IAS 1 requires that a reconciliation between the carrying amount of each class of contributed equity capital and each reserve at the beginning and end of each period be disclosed in:

Laws in relation to share buy-backs are primarily designed to protect the interests of the company's:

For-profit companies may be I Unlimited II Listed III Limited by guarantee IV No-liability

When a public share issue is made, the offer comes from:

Use the following information to answer questions A company’s capital consists of 50 000 ordinary shares issued at £2 and paid to £1 per share. On 1 September, a first call of 50c was made on the ordinary shares. By 30 September, the call money received amounted to £22 500. No further payments were received, and on 31 October, the shares on which calls were outstanding were forfeited. On 15 November, the forfeited shares were reissued as paid to £1.50 for a payment of £1 per share. The appropriate cash amount from the reissue was received on 19 November. Costs of reissue amounted to £2 000. The company’s constitution provided for any surplus on resale, after satisfaction of unpaid calls, accrued interest and costs, to be returned to the shareholders whose shares were forfeited. -The amount of the surplus payable to the shareholders whose shares were forfeited is:

Gains and losses on available-for-sale financial assets are recognised directly in equity until the financial asset is derecognised. At this time the cumulative gain or loss previously recognised is:

Gains or losses that arise as a result of translating foreign currency denominated operations into the reporting currency are recognised in income:

ABC Ltd was registered as a corporation on 1 July 2016. On 4 July 2016, ABC Ltd issued a prospectus offering 100 000 ordinary shares at an issue price of £2.50 each, payable £1.50 on application and £1.00 on allotment. Application closed on 1 August 2016 with the company having received applications for 110 000 shares. The shares were allotted on 15 August 2016, with the over-subscription amount being refunded to unsuccessful applicants. All allotment monies were received by 31 August 2016. Following the allotment the balance in the Share Capital account would be:

A company issued share option is an instrument that gives the holder the right but not the obligation to:

Dividends declared after the balance date but before the financial statements are authorised for issue:

Which of the following journal entries demonstrates the appropriate accounting treatment for share issue costs?

Which of the following statements is incorrect?