If the Balance of the Share Capital Account Is $300,000

question 26

Multiple Choice

If the balance of the share capital account is $300,000 at the beginning of the year and $410,000 at the end of the year, and there has been a 1 for 6 bonus issue of shares at the start of the year, the amount that will appear in the statement of cash flows for proceeds from the issue of shares is:

• A)$360,000.
• B)$300,000.
• C)$410,000.
• D)$60,000.

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Definitions:

Allowance for Doubtful Accounts

An accounting provision made for accounts receivable that may not be collectable.

Accounts Receivable

Funds that a company's clients have not yet paid for products or services that have already been provided to them.

Allowance Method

An accounting technique that estimates and sets aside a portion of a company's receivables as uncollectable, acknowledging potential credit losses.

Uncollectible Account Receivable

An uncollectible account receivable is a debt owed to a company that it is unable to collect, typically leading to its classification as a bad debt expense.