Chapter 3 Flashcards
1
Q
When a company is established it is set up by the owners investing money known as?
A
Capital
2
Q
Shares issued to the shareholders are recorded in an account known as?
A
Share Capital
3
Q
What heading does “Share Capital” come under in the SFP?
A
Equity
4
Q
What does capital invested represent?
A
The amount belonging to the owners
5
Q
If shareholders invest an amount above the nominal value of shares they are buying, the excess is recorded where?
A
Share Premium Account
6
Q
Where is the “Share Premium Account” recorded in the SFP?
A
Recorded under equity (Shown separately from share capital)
7
Q
Where is the “Cost of Purchases” included?
A
The Cost of Sales in the SCI
