In the Case of a Share Issue Being Oversubscribed,excess Application

question 10

Multiple Choice

In the case of a share issue being oversubscribed,excess application monies:

• A) Will always be refunded to applicants.
• B) May be used to reduce future amounts owing on allotment if the shares are issued on a pro rata basis.
• C) Must be recorded as a revenue in the current financial period.
• D) Must be placed in a trust account until a refund is requested by applicants.
• E) None of the given answers.

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Definitions:

Common Stock

Equity ownership in a corporation, entitling holders to vote on company matters and receive dividends.

Lending Money

The act of giving money to another party with the expectation of receiving the money back plus interest or other benefits.

Collecting Loans

The process of obtaining repayment of a loan or debt, including the principal and any accrued interest.

Investing Activities

Financial activities related to the acquisition and disposal of long-term assets and other investments not considered as cash equivalents.