What Is the Significance of "Par Value" for Accounting Purposes

question 61

Multiple Choice

What is the significance of "par value" for accounting purposes?

• A)The par value determines the amount of contributed surplus.
• B)Par value has no economic significance for accounting purposes.
• C)Par values determines the amount of cash received from investors.
• D)Par value shares are not permitted under IFRS or ASPE.

---

Definitions:

Hierarchical Approach

An organizational strategy where decision-making and power are concentrated at higher levels of management, promoting a clear chain of command.

Flat Organizations

A company structure with few or no levels of middle management between staff and executives, promoting a more collaborative and less hierarchical environment.

Differentiation Strategy

A company that uses a differentiation strategy attempts to develop an image or reputation for its product or service that sets the company apart from its competitors.

Diversification Strategy

A business approach where a company broadens its range of products or markets to reduce risk and increase potential for growth.