When Accounting for Share Issues, the Ultimate Debit and Credit

question 38

Multiple Choice

When accounting for share issues, the ultimate debit and credit entries are to which accounts?

• A) DR Bank; CR Share capital
• B) DR Bank; CR Allotment
• C) DR Share Capital; CR Bank
• D) DR Application; CR Share capital

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Definitions:

Punitive Damages

Monetary compensation awarded in lawsuits over and above actual damages, intended to punish the defendant for particularly egregious conduct.

Policy Limits

The highest sum an insurer will disburse for a claim covered by the policy.

Subrogation Clause

A clause in an insurance policy that allows the insurer to assume the legal rights of the insured to seek recovery from third parties responsible for causing an insured loss.

Faulty Stove

A stove that has defects or malfunctions, potentially causing inconvenience or danger to users.