If Shares Are Issued as Part of the Consideration Paid,transactions

question 16

Multiple Choice

If shares are issued as part of the consideration paid,transactions costs such as brokerage fees may be incurred.According to AASB 3 Business Combinations the appropriate accounting treatment for such costs in the records of the acquirer is a debit to:

• A)share capital
• B)investments
• C)cash
• D)acquisition expenses.

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Definitions:

Subchapter S Corporation

A type of corporation created through an IRS tax election to pass corporate income, losses, deductions, and credits through to shareholders for federal tax purposes.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, giving them a right to a portion of the corporation's profits and assets.

Constitution

The core rules or established traditions that govern how a state or any other organization is managed.

Corporation Law

Legal principles that govern the formation, operation, and dissolution of corporations.