The Conversion of Preference Shares into Ordinary Shares Requires That

question 46

Multiple Choice

The conversion of preference shares into ordinary shares requires that any excess of the par value of the ordinary shares issued over the carrying amount of the preference shares being converted should be

• A)reflected currently in income.
• B)reflected currently in other comprehensive income.
• C)treated as a prior period adjustment.
• D)treated as a direct reduction of retained earnings.

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Definitions:

Marginal Product

The additional output that is generated by adding one more unit of a specific input, ceteris paribus.

Marginal Product

The additional output resulting from the use of one more unit of a variable input, holding all other inputs constant.

Production Possibilities

A curve that represents the maximum combination of goods or services that can be produced in a given period with available resources.

Marginal Product

The extra output generated from increasing a particular input by one unit, while all other inputs remain unchanged.