3. Companies mc

Under corporate legislation, the shareholders of a limited company are liable to the extent of:

• all the company debts

• the total assets of the company

• the market value of their shares

• the amount unpaid on their shares up to the full issue price

Debentures may be issued by:

• public companies

• private companies

• both public and private companies

• any business organisation that issues a prospectus

Another name for a Balance Sheet is:

• Statement of Operations

• Statement of Financial Position

Which of the following is an asset account?

• Accounts payable

• Prepaid insurance

• Unearned revenue

Which of the following would not be a current asset

• Accounts receivable

• Prepaid insurance

• Land

• Supplies

Which of the following statements relating to a no-liability company is not true?

• It must engage solely in mining activities.

• It must have the words 'No Liability' or 'NL' at the end of its name.

• There is no liability on the part of shareholders to pay calls on shares.

• Shareholders are personally liable for the debts of the company.

Which of the following statements is correct?

• Preference shareholders are entitled to a dividend every year.

• Directors' fees and audit fees appear in the Retained Earnings account.

• Interim dividends declared and paid during the year do not appear in the Statement of Financial Position.

• The balance of the Retained Earnings account does not appear in the Statement of Financial Position.

In relation to company income tax:

• Income tax appears in the Statement of Profit or Loss

• A company is not required to pay income tax; the shareholders pay income tax.

• Once income tax is paid in cash, it appears in the Statement of Financial Position.

• If income tax is paid in instalments, it does not appear in the Statement of Financial Position.

The Statement of Financial Position heading will specify a

• Period of Time

• Point in Time