Accounting Corp.
Accounting Corp.
Accounting Corp.
Stock is attractive to investors because stockholders are not liable for the corporation's
2. Market value per share is: The price at which a stock is bought and sold.
4. Par value of a stock refers to the: AMOUNT ASSIGNED PER SHARE BY THE
5. Stockholders (who are not officers or managers) are able to bind the corporation to
contracts. F
6. Common stockholders always share equally with all other stockholders (including
7. When a corporation issues par value stock at par, the journal entry consists of a debit to
8. When all authorized shares of a corporation’s stock have the same rights and
stockholders to purchase their proportional share of any common stock later issued by a
corporation. T
10. A company issued 110 shares of $100 par value common stock for $13,000 cash. The
11. Stated value stock is: NO PAR STOCK HAS AN ASSIGNED “STATED VALUE” PER
SHARE
12. A company issued 60 shares of $100 par value common stock for $7,600 cash. The
journal entry to record the issuance is: DR. CASH 7,600, CR. COMMON STOCK 6,000,
13. Corporations avoid many of the government regulations that proprietorships and
14. Percy Corporation was formed on January 1. The corporate charter authorized 100,000
shares of $10 par value common stock. During the first month of operation, the
corporation issued 400 shares to its attorneys in payment of a $5,000 charge for drawing
up the articles of incorporation. The entry to record this transaction would include:
15. A company issued 70 shares of $30 par value preferred stock for $4,000 cash. The
journal entry to record the issuance is: DR. CASH 4,000, CR. COMMON SHARE /
16. A company issued 60 shares of $100 par value common stock for $7,000 cash. The total
17. A corporation issued 5,000 shares of $10 par value common stock in exchange for some
land with a market value of $70,000. The entry to record this exchange is: DR. LAND
PREMIUM 20,000
18. A special right often granted to preferred stock is additional voting privileges. F
19. Organization expenses are the costs to start a corporation, such as legal fees, promoters’
20. Stockholders’ equity consists of paid-in (or contributed) capital and retained earnings. T
21. A corporation issued 6,000 shares of its $2 par value common stock in exchange for land
that has a market value of $84,000. The entry to record this transaction would include: A
72,000
22. The number of shares that a corporation’s charter allows it to sell is referred to as:
AUTHORIZED STOCK
23. The costs to start a corporation, including legal fees, promoters’ fees, and payments for a
24. Organization expenses are the costs to start a corporation, such as legal fees, promoters’
25. Stated value stock is no-par stock that has an assigned “stated” value per share. T
26. A corporation is an entity that is separate from its owners and has many of the same
rights as a person. T
27. A corporation sold 14,000 shares of its $1 par value common stock at a cash price of $13
per share. The entry to record this transaction would include: CREDIT COMMON
STOCK 14,000
29. The price at which a share of stock is bought or sold is known as par value. F
31. Stockholders (who are not officers or managers) are able to bind the corporation to
contracts. F
32. A corporation sometimes issues more than one class of stock, including preferred stock
34. Statement I: Outstanding shares are unissued and issued shares currently held by
stockholders. FALSE
Statement II: If the company uses the journal entry method, issuance of share
capital for cash should be recorded with a credit to Unissued Share Capital
account. TRUE
35.
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