A-LevelAccountingCompany Accounts (Share Capital & Reserves)May/June 2017Paper 1 Q171 Mark

Which statement about ordinary shares is correct?

Q: What topic does this question test?

This question tests Company Accounts (Share Capital & Reserves) in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Adividends on ordinary shares are an appropriation of profit

Bdividends on ordinary shares are paid at the same rate each year

Cordinary shares are never issued at a premium

Dthe holders of ordinary shares are creditors of a company

✓ Correct Answer

The correct answer is A: dividends on ordinary shares are an appropriation of profit

📋 Examiner Report & Trap Analysis

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...

🎯 Mark Scheme Breakdown

Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.

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About This A-Level Accounting Question

Topic

This multiple-choice question tests Company Accounts (Share Capital & Reserves) in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting May/June 2017 examination, Paper 1 Variant 2.

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