A-LevelAccountingCompany Accounts and ReservesOct/Nov 2011Paper 1 Q191 Mark
What occurs in a rights issue of shares?
AAny premium on the issue is added to a capital reserve.
BAny premium on the issue is added to a revenue reserve.
CAny premium on the issue is written off to the income statement.
DThe nominal value of the issue is written off to the income statement.
✓ Correct Answer
The correct answer is A: Any premium on the issue is added to a capital reserve.
📋 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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