Chapter 11 Flashcards
1
Q
Bonus issue vs rights issue
A
Bonus issue: an issue of fully paid shares to existing shareholders, free of charge, in proportion to their existing shareholdings
Rights issue: new shares are offered to existing shareholders in proportion to their existing shareholding, usually at a discount to the current market price
2
Q
If a company has a debit balance on its income tax payable account, does it owe or is it owed money?
A
It owes money
3
Q
A provision made in 20x4 for 10,000 is claimed in 20x8 for an eventual 12,000. Is this classified as a 2,000 or 12,000 expense?
A
2,000
