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WAEC Financial Accounting 1993 Question 9

Question 9

Company Accounts

A share is under-subscribed when

  1. A.it is offered for sale at less than nominal value
  2. B.it is offered for sale at nominal value.
  3. C.the number of shares applied for is less than the offer
  4. D.it is offered for sale at more than nominal value
  5. E.the number of shares applied for is more than the offer.
Show the answer and explanation

Answer: C (the number of shares applied for is less than the offer)

Explanation

Under-subscription means the public applied for fewer shares than were offered.