CAF-1 · Chapter 8 · Question 15 of 15
Transaction costs directly related to the issuance of new shares should be:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Deducted from equity (typically from share premium if available).
Explanation
Transaction costs directly related to the issue of shares are accounted for as a deduction from equity, typically debited against the share premium account if one exists, or retained earnings.
More Statement of Changes in Equity MCQs
- Q2How should a final dividend declared just after the year-end be presented in the financial statements for that year?
- Q3Where must an entity present the amount of dividends recognized as distributions to owners during the period?
- Q4Which of the following causes an overall change in equity during a period?
- Q5An interim dividend of Rs. 15 million is paid during the financial year. How is this recorded in the financial statements?
- Q6What is the primary purpose of a 'Dividend Equalization Reserve'?