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WAEC Financial Accounting 1992 Question 44

Question 44

Company Accounts

The excess of the par value of a company's shares over the amount for which they are issued to the public is called

  1. A.discount
  2. B.profit
  3. C.loss
  4. D.premium
  5. E.reserve.
Show the answer and explanation

Answer: A (discount)

Explanation

If shares are issued for less than their par value, the shortfall is a discount.