NECO Accounting 2022 Objective — Question 37

Question 37 of 50 from the National Examinations Council (NECO) Accounting 2022 Objective paper, with the correct answer and a full explanation.

The maximum amount a company can raise through the issue of shares is

A. reserve capital
B. authorized capitalCorrect
C. paid-up capital
D. loan capital

Explanation

Authorized capital is the capital stated at the onset of the company in its memorandum of association; the company cannot raise share capital beyond this without amending it.

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