Question Details

If common stock is issued for an amount 



1. Retained earnings is
a. always equal to the amount of cash that the corporation has generated from
operations.
b. a part of the paid-in capital of the corporation.
c. a part of the stockholders' claim on the total assets of the corporation.
d. closed at the end of each accounting period.
2. When stock is issued for legal services, the transaction is recorded by debiting
Organization Expense for the
a. stated value of the stock.
b. par value of the stock.
c. market value of the stock.
d. book value of the stock.
3. If Vickers Company issues 2,000 shares of $5 par value common stock for $140,000,
a. Common Stock will be credited for $140,000.
b. Paid-In Capital in Excess of Par Value will be credited for $10,000.
c. Paid-In Capital in Excess of Par Value will be credited for $130,000.
d. Cash will be debited for $130,000.
4. If common stock is issued for an amount greater than par value, the excess should be
credited to
a. Cash.
b. Retained Earnings.
c. Paid-in Capital in Excess of Par Value.
d. Legal Capital.
5. If stock is issued for a noncash asset, the asset should be recorded on the books of the
corporation at
a. fair market value.
b. cost.
c. zero.
d. a nominal amount.




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