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WAEC Financial Accounting 2012 Question 43

Question 43

Company Accounts

An underwriter for a company's share is paid

  1. A.interest.
  2. B.commission.
  3. C.dividend.
  4. D.salary.
Show the answer and explanation

Answer: B (commission.)

Explanation

An underwriter agrees to buy any shares the public does not take up and is paid an underwriting commission for this.