A Shareholder Makes an Investment in a Company

question 67

Multiple Choice

A shareholder makes an investment in a company. The net effect of this contribution is an increase in:

• A) share capital only.
• B) both assets and share capital.
• C) both assets and liabilities.
• D) both liabilities and share capital.

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Definitions:

Antifraud Provisions

Regulatory measures designed to protect investors by preventing fraudulent trading practices and securities fraud.

Securities Acts

Collectively refers to federal laws, such as the Securities Act of 1933 and the Securities Exchange Act of 1934, regulating the securities industry in the U.S.

Documentary Letter of Credit

A bank's promise to pay the seller on behalf of the buyer upon receipt of specified documents, typically used in international trade.

Seller's Risk

The risk borne by the seller of goods until the ownership is transferred to the buyer, typically under specified delivery terms.