Exam 4: Introduction to Limited Companies

A company needs $1,500,000 for expansion.They decide to raise the capital by issuing new shares.How many shares does the company need to sell to raise the amount,if the last share issue was at a price of $1 each and the current market price for the company's shares is $1.50 per share?

Which statement is untrue for private (Pty Ltd)companies?

The largest source of new finance for Australian companies is:

The offer of new shares to existing shareholders at no cost,in proportion to the amount of their current holding,is known as:

Jane and Jarrod have been employed by two different firms of photographers.They decide they should get together and establish their own business,called JJ Photographers.Each has decided to contribute $20,000 in cash to buy equipment,and they will rent premises in the local shopping centre.Both will work full time in the business and share profits and losses equally.They are not sure whether they should set up as a partnership or as a private company and have come to you for advice. REQUIRED: Explain to Jane and Jarrod the advantages and disadvantages of a partnership versus a private company structure for their new venture.

The level of control in a company that is the highest is:

An audit fee expense will most likely be found in the statement of financial performance for a:

Which of the following is unlikely to be a reserve found in a company's statement of financial position.?

If a company issues 20,000 ordinary shares which are sold at $4 per share,the effect on the accounting equation is:

Small proprietary companies are relieved of many of the reporting requirements to which public companies are subject.A company is deemed to be 'small' if it satisfies two of three specified criteria.Which of the following is not one of the criteria?

Additional regulations that may apply to limited companies (depending on their classification)do not include requirements relating to:

The disadvantages of a company business structure include all of the following except:

Under the Corporations Act,a proprietary (Pty Ltd)company is restricted to a maximum of:

Which of the following statements in relation to dividends is true?

A company is legally required to retain a specific part of its capital to:

A shareholder in Company C owns 1,000 shares bought for $1 each.The company decides to make a bonus issue of one new share for every two existing shares held.How many shares does the shareholder now have in Company C?

Which of these is not a consequence of the status of a company as a separate legal entity?

Financial accounts prepared by companies under the Corporations Act must meet which general standard of reporting?

Sovereign Ltd has an issued capital of 300,000,000 shares sold at $2 each.Aman holds 6,000 shares.If Sovereign Ltd makes a 1 for 3 bonus issue,how many bonus shares will Aman acquire?

A public issue of shares where the investor must state in advance the amount they are willing to pay for the shares is called a: