Share issue costs refer to the costs of obtaining the legal, promotional, and accounting services necessary to effect the sale of shares. The costs reduce the net cash proceeds from selling the shares and thus paid-in capital-excess of par, and are:
A) Not recorded separately.
B) Recorded as an asset.
C) Recorded as a liability.
D) Amortized over time.

Question

Quizplus · Accepted Answer

Share issue costs are considered to be directly related to the issuance of shares and are not recorded as a separate asset, liability, or amortized over time. Instead, they are directly deducted from the proceeds of the share issue, reducing the amount recorded in paid-in capital-excess of par.

Share Issue Costs Refer to the Costs of Obtaining the Legal