Accounting Recognition Must Be Given to Common Share Subscriptions on the Subscription

question 122

Multiple Choice

Accounting recognition must be given to common share subscriptions on the subscription date:

• A) to guarantee the receipt of dividends subsequent to the subscription date.
• B) because the dollar amount is usually large.
• C) because all events relating to the common share accounts must be disclosed.
• D) because a legal contract is involved.

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Definitions:

Sales Over Cost

It refers to the ratio or difference between the sales generated and the cost of the goods sold, aimed at measuring profitability.

Gross Profit

The income a firm generates once it subtracts the expenses involved in the production and sale of its goods, or the expenses incurred from offering its services.

Income From Operations

The earnings generated from a company's everyday, core business operations.

Single-Step Statement

An income statement format that totals revenues and subtracts expenses to find the net income, using only one step.