What is the difference between the procedure of issuing equity shares and preference shares of a company?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- No difference.
There is no difference between the procedure of issuing equity shares and preference shares of a company.
The procedure for accounting for the issue of both equity and preference shares is the same. To differentiate between the two the words ‘Equity’ and ‘Preference’ is prefixed to each and every instalment.