ParCor Finals Reviewer

What is the primary characteristic of share capital in a corporation?

• A) It represents the personal investments of the directors.
• B) It is the amount of money invested by the government in the corporation.
• C) It represents the money raised through the issuance of shares to stockholders.
• D) It represents a loan to the corporation from its creditors.

Which of the following is true about the authorized share capital of a corporation?

• A) It is the capital needed of the corporation.
• B) It is the total value of shares that a corporation is authorized to issue as specified in its Articles of Incorporation.
• C) It is the same as the number of shares issued by the corporation.
• D) It is the same as the retained earnings of the corporation.

When a corporation issues shares for a non-cash asset, how is the share capital recorded?

• A) The share capital is recorded at the par value of the shares issued.
• B) The share capital is recorded at the fair value of the non-cash asset.
• C) The share capital is recorded at the historical cost of the non-cash asset.
• D) The share capital is recorded at the book value of the non-cash asset.

In the Philippines, which government agency is responsible for the registration of share capital in a corporation?

• A) Securities and Exchange Commission (SEC).
• B) Bureau of Internal Revenue (BIR).
• C) Department of Trade and Industry (DTI).
• D) Bangko Sentral ng Pilipinas (BSP).

Which of the following would decrease a corporation’s share capital?

• A) Issuance of additional shares.
• B) Stock split.
• C) Redemption of shares.
• D) Payment of dividends in shares.

What is the difference between par value and no-par value shares?

• A) Par value shares have a nominal value assigned by the corporation, while no-par value shares do not.
• B) Par value shares are issued at a premium, while no-par value shares are issued at par.
• C) No-par value shares can only be issued by government-owned corporations.
• D) There is no difference; both types are treated equally in accounting.

When a corporation issues shares at a price above par value, the excess is recorded as:

• A) Share premium.
• B) Retained earnings.
• C) Ordinary Shares.
• D) Accumulated surplus.

In the context of share capital, what is the purpose of a stock dividend?

• A) To increase the corporation’s share capital by issuing additional shares to existing shareholders.
• B) To provide cash dividends to stockholders.
• C) To reduce the par value of the shares.
• D) To issue shares at a premium

XYZ Corporation issued 100,000 shares of ₱10 par value stock for ₱15 per share. What is the total amount of share capital?

• A) ₱1,000,000
• B) ₱1,500,000
• C) ₱1,500,000 + ₱500,000 premium
• D) ₱1,000,000 + ₱500,000 premium

ABC Corporation issued 50,000 shares with a par value of ₱20 each. The shares were issued for ₱25 per share. What is the total amount credited to the Ordinary share and Share Premium?

• A) ₱1,000,000 for Ordinary share; ₱250,000 for SHARE PREMIUM
• B) ₱1,000,000 for Ordinary share; ₱500,000 for SHARE PREMIUM
• C) ₱1,250,000 for Ordinary share; ₱500,000 for SHARE PREMIUM
• D) ₱1,250,000 for Ordinary share; ₱0 for SHARE PREMIUM