15: Company financial statements

Question 1

Are there voting rights attached to ordinary shares or preference shares?

Answer 1

Ordinary shares

Question 2

Which share has preference to dividends?

Answer 2

Preference shares

Question 3

Do preference shares have voting rights

Answer 3

Generally speaking, no

Question 4

What the names for the two types of special preference shares?

Answer 4

Redeemable preference shares and non-redeemable preference shares

Question 5

Are redeemable preference shares classed as debt or equity?

Answer 5

Debt

Question 6

When dividends are paid out to redeemable preference shares, where are the dividends accounted for in the company?

Answer 6

Dividends are classified as finance costs in the profit or loss statement

Question 7

Are irredeemable preference shares classed as debt or equity?

Answer 7

Equity

Question 8

What is the double entry for the sale of one new share with a nominal value of £1 but issue price of £1.50

Answer 8

Dr Cash £1.50
Cr Share capital £1.00
Cr Share premium £0.50

Question 9

The difference between called up share capital and paid up share capital is accounted for where in the SFP?

Answer 9

Receiveables