A-LevelAccountingPreparation of financial statements9706/12 · May/June 2015 · Q181 Mark

A limited company issues 5000 ordinary shares of $2 each at a premium of $0.50. What is the effect on share capital and liquidity?

Aincrease 10000 improve

Bincrease 10000 no effect

Cincrease 12500 improve

Dincrease 12500 no effect

✓ Correct answer

A: increase 10000 improve

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2015 Paper 1 Variant 2, question 18.

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