Quiz 3 (IBT)

When shares with par value are sold, the excess of the proceeds over the par value is credited to

• Share capital

• Share premium

• Retained earnings

• Gain on issuance of shares

When shares without par value are sold, the excess proceeds

• over stated value shall be credited to

• Retained earnings

• Share premium

• Share capital

If shares are issued for a noncash consideration, the shares issued shall be measured by

• Fair value of the shares

• Par value of the shares

• Fair value of the noncash consideration

• Carrying amount of the noncash consideration

If shares are issued to extinguish a financial liability, what is the initial measurement of the shares issued?

• Par value of the shares

• Fair value of the shares

• Fair value of liability extinguished

• Book value of the shares

When shares are issued in payment for services, what is the least appropriate basis for recording the transaction?

• Fair value of the services .

• Par value of the shares

• Fair value of the shares

• Any of these provides an appropriate basis for recording the transaction

What is the meaning of net assets of a corporation?

• Contributed capital

• Shareholders' equity

• Retained earnings

• Legal capital

The two primary account classifications within shareholders' equity are

• Preference shares and retained earnings

• Par value of ordinary shares and retained earnings

• Preference shares and ordinary shares

• Contributed capital and retained earnings

Details of each class of share capital should be reported

• On the face of the statement of financial position only.

• In disclosure notes only.

• On the face of the statement of financial position or in disclosure notes.

• On the face of the statement of comprehensive income and in disclosure notes.

The corporate charter is known as

• Articles of incorporation

• Statement of organization

• By-laws

• Registration statement

Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following, except

• Ease of raising capital

• Low government regulation

• Limited liability

• Ease of ownership transfer