Which of the Following Statements About a 2:1 Share Split

question 19

Multiple Choice

Which of the following statements about a 2:1 share split is NOT true?

• A) The number of shares is doubled.
• B) The unit market price of each share is reduced.
• C) The value of share capital is increased.
• D) No journal entry is required.

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Definitions:

Accounts Payable

Accounts payable refers to the amounts owed by a company to its creditors for goods or services received that have not yet been paid for.

Nominal Accounts

Accounts that are closed at the end of each accounting period; includes revenue, expense, and withdrawal accounts.

Sales Journal

A specialized accounting journal used to record all sales transactions of a company on credit.

Accounts Receivable Subsidiary Ledger

A ledger detailing individually the amounts owed by each customer, supplementing the general ledger's summary account.