Test FINALT

Stated value of no-par stock is:

An amount assigned to no-par stock by the corporation's board of directors

corporations avoid many of the state regulations and controls that propetership and partnerships are subjected too

False

A corporation is a legal entity separate from its owner?

True

A corporation may be authorized to issue both common and preferred stock

True

par value of a stock refers to the

Value assigned to a share of stock by the corporate charter

a corporation issued 100 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filling its charter with the state. The entry to record this transaction will include

a $1,300 credit to paid in capital in excess of par value, common stock.

a corporation sold 14,000 shares of $1 par value common stock at a cash price of $13 per share. The entry to record this transaction would include:

a credit to common stock for $14,000

a corporation issued 6,000 shares of its $2 par value common stock in change for land that has a market value of $84,000. The entry to record this transaction would include

a credit to paid in capital in excess of par value, common stock for $72,000

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:

a debit to organization expenses for $5,000

The number of shares that a corporation's charter allows it to sell is referred to as:

authorized stock

when a corporation has only one class of stock, the stock is called?

common stock

Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be:

debit cash 312,000, credit common stock $26,000; credit paid in capital in excess of par value, common stock $286,000

Common stock always carries a preference for receiving dividends over preferred stock.

false

If a corporation issues 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding

false

The total number of shares outstanding is the authorized stock.

false

common shareholders always share equally with all other shareholders in dividends

false

shareholders in a corporation have the power to bind the corporation contracts

false

the price at which a share of stock brought or sold is known as par value.

false

In many states, the minimum amount that stockholders must contribute to the corporation, and which is intended to protect the creditors of the corporation, is called the:

minimum legal capital

the total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

referred to as paid in capital

Minimum legal capital requirements are intended to protect creditors.

true

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

true

Stated value stock is no-par stock that has been assigned a "stated" value per share by the corporation board of directors

true

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

true

a preemptive right means shareholders can purchase their proportional share of a common stock issued later by the corporation

true

a proxy is a doc that gives a designated agent the right to vote a shareholder stock

true

a registrar keeps stockholder records and prepares official list of stockholders and dividends payments

true

organization expenses of a corporation often include legal fees and promoter fees.

true

stockholders equity consist of paid in capital and retained earnings

true