Direct incremental costs incurred to sell shares such as underwriting costs should be accounted for as
A) a reduction of share capital.
B) an expense of the period in which the shares are issued.
C) an intangible asset.
D) a reduction of retained earnings.

Question

Quizplus · Accepted Answer

Direct incremental costs incurred to sell shares, such as underwriting costs, should be accounted for as a reduction of the proceeds received from the share issue, which effectively reduces share capital.

Direct Incremental Costs Incurred to Sell Shares Such as Underwriting