Which of the Following Statements Relating to Ordinary Shares Is

question 44

Multiple Choice

Which of the following statements relating to ordinary shares is incorrect?

• A) Ordinary shares receive their dividends after the preference shares.
• B) Holders of ordinary shares have the right to sell their shares.
• C) The market price of ordinary shares tends to fluctuate with expectations of future profits.
• D) Ordinary shares have a fixed rate of dividend attached.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is usually increased. For example, assets have a normal debit balance, while liabilities have a normal credit balance.

Financial Statement

Documents that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Permanent/Temporary

Refers to the classification of accounts or differences; permanent accounts are ongoing and not closed at the end of the accounting period, whereas temporary accounts are closed and reset.

Normal Balance

The side (debit or credit) of an account that is typically increased.