A-LevelAccountingCompanies (Share Capital & Reserves)May/June 2016Paper 1 Q181 Mark
The trial balance on 31 December 2015 showed the following information. ordinary share capital ($1 shares) $500000 retained earnings $300000 On 1 January 2016 the directors created the general reserve of $70000. At the same time 200000 ordinary shares were issued for $300000. By which amount did the total reserves increase on 1 January 2016?
A$100000
B$170000
C$300000
D$370000
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The correct answer is A. This question tests the candidate's understanding of companies (share capital & reserves) within the Accountingsyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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