When ordinary shares are sold on subscription *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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When ordinary shares are sold on subscription *
a. The Ordinary Shares account is credited when the subscription price has been fully paid and the share is issued.
b. The Ordinary Shares account is credited when the subscription contract is signed and a down payment is received.
c. The Ordinary Shares account is not used. Shares issued on subscription are credited to Subscribed Ordinary Shares, a permanent shareholders’ equity account.
d. A shareholders’ equity account called Subscriptions Receivable is used to record the par value of the shares issued.
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