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Fundamentals of financial accounting

CHAPTER 11 – ACCOUNTING FOR THE ISSUE OF SHARES

11.1 Which of the following statements is true in relation to a rights issue of
shares by an entity?

A No cash is received by the entity as a result of making the rights issue

B The entity issues shares for cash at market price of the shares

C The entity issues shares for cash at a price less than the market price of
the shares

D None of the above

11.2 Which of the following statements are true?

(1) Dividends paid by an entity are excluded from the statement of changes in
equity

(2) Dividends received by an entity are included in the statement of changes
in equity

(3) Dividends received by an entity are excluded from the statement of
changes in equity

(4) Dividends paid by the entity are included in the statement of changes in
equity

A (1) and (2)

B (3) and (4)

C (1) and (4)

D (2) and (3)

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