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WAEC Financial Accounting 2015 Question 40

Question 40

Company Accounts

A person who has applied to purchase shares in a company is referred to as

  1. A.a promoter.
  2. B.a subscriber.
  3. C.an allottee.
  4. D.an underwriter.
Show the answer and explanation

Answer: B (a subscriber.)

Explanation

An applicant for shares is a subscriber; he becomes an allottee only when shares are allotted to him.