Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:
Which document invites the public that a new company has come into existence and it needs funds for doing business?
Options:
Register
Pre-document
Pro-rata register
Prospectus
Correct Answer:
Prospectus
Explanation:
The company first issues the prospectus to the public. Prospectus is an invitation to the public that a new company has come into existence and it needs funds for doing business. It contains complete information about the company and the manner in which the money is to be collected from the prospective investors.