If Ordinary Shares Are Issued for an Amount Greater Than

question 273

Multiple Choice

If ordinary shares are issued for an amount greater than par value, the excess should be credited to

• A) Cash.
• B) Retained Earnings.
• C) Share Premium-Ordinary.
• D) Legal Capital.

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Definitions:

Residual Value

The remaining value of an asset after accounting for depreciation and usage over time.

Depreciation

A systematic reduction in the recorded value of a fixed asset, recognizing wear and tear over time.

Estimated Life

The expected period over which an asset is useful to the owning entity, affecting calculations like depreciation.

Residual Value

The anticipated financial return of an asset at the time of its disposal following the end of its usefulness.