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WAEC Financial Accounting 2002 Question 24

Question 24

Company Accounts

When shares are oversubscribed, the promoter may decide to scale down. When this is done, the shares are issued proportionately

  1. A.on pro-rata
  2. B.at discount
  3. C.at par
  4. D.at premium.
Show the answer and explanation

Answer: A (on pro-rata)

Explanation

Scaling down allots shares in proportion to applications (pro rata).