Aye Corp Sells Common Shares on a Subscription Basis

question 78

Multiple Choice

Aye Corp. sells common shares on a subscription basis. The Common Shares account should be credited when the

• A) shares are subscribed for.
• B) first payment is made.
• C) last payment is made.
• D) last payment is made and the shares are issued.

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Definitions:

Invisible Hand

A concept introduced by Adam Smith to describe the unintended social benefits resulting from individual actions when individuals pursue their own interests.

Competitive Market System

A market structure characterized by many buyers and sellers, free entry and exit from the market, and products that are similar.

Productive Efficiency

A situation where a firm produces goods at the lowest possible cost, utilizing all of its resources fully and effectively.

Pure Competition

A market structure characterized by a large number of small firms producing identical products, with no single firm having the market power to influence prices.