Chapter 2 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The official recognition of shares for trading on a securities exchange is known as A) redemption B) incorporation Q listing D) registration 2) Holly Ltd decide to issue 100000 ordinary shares at $2 each and require applicants to pay 50 cents for each share applied for on application. Applications are received for 120 000 shares. The journal entry to record the receipt of the application money is: A) Bank trust 200 000 B) Bank trust 60 000 Application 200000 Application 60000 C) Application 60 000 D) Bank trust 50 000 Bank trust 60 000 Application 50000 3) A request to make a further payment on the outstanding balance of a partly-paid share is referred to as a/an: A) dividend B) call O) allotment D) application 4) A typical feature of debt financing is: A) the right to receive payments at agreed dates B) the absence of an entitlement to return of capital, except on liquidation ) the right to vote at the annual general meeting D) the right to receive dividends 5) Any contract that evidences a residual interest in the assets of anentity after deducting all of its liabilities is referred to as a/an A) debt instrument C mortgage B) equityinstrument D) none of the above 6) If a company grants options to its employees to acquire shares in the future, the journal entry to record the granting of the options is: A) Debit Cash Credit Options B) Debit Wages Expense Credit Options C) Debit Cash Credit Share Capital D) Debit Options Credit Share Capital 7) Which of the following is not one of the criteria for alarge proprietary company under the Corporations Act? A) consolidated revenue of at least $25 million B) 50 or more full- time employees total liabilities of greater than $5 million D) end of financial year consolidated gross assets of at least $125 million 8) Company prospectuses must be lodged with: A) ASX B) FRC AASB D) ASIC