BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Deduction from the related subscribed share capital in the shareholders’ equity section
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Current asset
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Long term investment
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Other asset
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Detailed explanation-1: -Subscriptions receivable collectible within one year may be shown as current assets. Deposits on subscriptions to a proposed increase in capital stock may be shown as part of Stockholders’ Equity as a separate item in the capital stock section.
Detailed explanation-2: -The share subscriptions receivable functions similar to the accounts receivable (A/R) account. Once the receivable payment is paid in full, the common shares subscribed account is closed and the shares are issued to the purchaser.
Detailed explanation-3: -The Common Stock Subscribed account is reported on the balance sheet in the stockholders’ equity section in the entity’s capital stock section below common stock.
Detailed explanation-4: -Any funds due for shares issued but not fully paid for are called-up share capital.