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Chapter 2 MULTIPLE CHOICE Choose the one alternative that best completes the statement or answers the question 1) The official recognition of shares for trading on a securities exchange is known as A) redemption C) listing D) recistration 2 Holly Ltd decide to issue 100000 ordinary shares at S2each and require applicants to pay 50 cents for each share applied for on application. Applications are received for 120 000 shares. The ournal entry to record the receipt of the application moneyis A) Bank trust 200 000 B) Bank trust 60000 Application 200000 Application 00 C) Application 60 000 D) Bank trust 50000 Bank trust 60 Application 000 3) A request to makea further payment onthe outstanding ballance of a partly-paid share is referred to as alan: A) dividend B) cal C) allotment D) application 4) A typical feature of debt financing is A) the right to receive payments at agreed dates B) the absence of an entitlement to retum of capital, exoept on liquidation C) the right to vote at the annual general meeting D) the right to receive dividends ) Any contract thatevidences a residual interest in the assets of an entity after deducting all of its liabilities is referred to as a/an A) debt instrument C) mortgage D) none of theabove 6) If a company grants options to itsemployees to acquire shares in the futuse, the joumal entry bo record the sranting of the optiogtaqdire tares n the A) Debit Cash Credit Options B) Debit Wages Expree Credit Options C) Debit Cash Credit Share Capital D) Debit Options Credit Share Capital 7 Which of the following is pot one of the criteria for a large proprietary company under the Corporations A) consolidated revenue of at least $25 million B) 50 or more full-time employees C total liabilities of greater than $5 million D) end of financial year consolidated gross assets of at least $125 milliorn S) Company prospectuses must be lodged with: A) ASX B) FRC O AASB D) ASIC 9) When a company sells the right to buy a certain number of shares in the company at a pre- determined price at or up to some fised time in the future, that right is known as a: A) bonus issue C) call option D) private issue 10) Which of the following is an example of a share issue cost? A) stamp duty B) legal fees D) all of the above

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