Question on: JAMB Commerce - 2013
The amount of authorized capital that shareholders have subscribed to is
A
issued share capital
B
authorized share capital
C
owner's equity
D
working capital
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Correct Option: B
The correct answer is issued share capital. Here's why:
- Issued share capital represents the portion of the authorized share capital that the company has actually sold to shareholders. This is the amount the shareholders have subscribed to.
- Authorized share capital is the maximum amount of share capital a company is legally permitted to issue.
- Owner's equity represents the owners' stake in the company, including share capital, retained earnings, etc.
- Working capital is a measure of a company's short-term financial health, calculated as current assets minus current liabilities.
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