Question Details

The sale of common stock




1.	If stock is issued for a noncash asset, the asset should be recorded on the books of the corporation at
a.	fair value.
b.	cost.
c.	zero.
d.	a nominal amount.



	2.	If stock is issued for less than par value, the account
a.	Paid-In Capital in Excess of Par is credited.
b.	Paid-In Capital in Excess of Par is debited if a debit balance exists in the account.
c.	Paid-In Capital in Excess of Par is debited if a credit balance exists in the account.
d.	Retained Earnings is credited.



	3.	The sale of common stock below par
a.	is a common occurrence in most states.
b.	is not permitted in most states.
c.	is a practice that most stockholders encourage.
d.	requires that a liability be recorded for the difference between the sales price and the par value of the shares.



	4.	Paid-In Capital in Excess of Stated Value
a.	is credited when no-par stock does not have a stated value.
b.	is reported as part of paid-in capital on the balance sheet.
c.	represents the amount of legal capital.
d.	normally has a debit balance.


5.	A separate paid-in capital account is used to record each of the following except the issuance of
a.	no-par stock.
b.	par value stock.
c.	stated value stock.
d.	treasury stock above cost.







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