2.06 Unit Test

The concept being applied when a corporation records treasury stock at the price paid regardless of market value is Blank Space__________.

• bond sinking fund

• historical cost

• business entity

• treasury stock

Peter Pan Seafood issues 500 shares of $100 preferred stock for $90. What is the total amount received?

• $50,000

• $4,500

• $45,000

• $5,000

What term best describes an amount set aside to pay a bond issue when it is due?

• bond sinking fund

• trustee

• bond repayment schedule

• interest expense

A corporation's own stock that has been issued and reacquired is called Blank Space__________.

• treasury stock

• common stock

• par value stock

• preferred stock

A bond sinking fund is classified as what kind of account?

• stockholder's equity

• asset

• expense

• liability

A corporation issued 1000 shares of $100 preferred stock for $90. What was the amount of the discount?

• $1,000

• $10,000

• $90,000

• $9,000

What is a long-term promise to pay a specified amount on a specified date and to pay interest at stated intervals?

• common stock

• treasury stock

• bond

• preferred

A person or institution given legal authorization to administer funds for the benefit of the owner is called a Blank Space__________.

• stockholder

• trustee

• director

• bondholder

What is not a characteristic of a bond?

• interest is fixed

• corporate creditors

• paid out of net income

• liability account

What is not a characteristic of a stock?

• dividends are not a fixed amount

• corporate owners

• paid out of net income

• liability account