from its stockholders The total amount of cash and other assets received by a co
ID: 2597183 • Letter: F
Question
from its stockholders The total amount of cash and other assets received by a corporation in exchange for its stock is: A) Always equal to its par value. B) Always equal to its stated value. C) Referred to as paid-in capital. D) Referred to as retained earnings. E) Always below its stated value. Stated value of no-par stock is: A) Another name for redemption value. B) An amount assigned to par value stock by the state of incorporation. C) The market value of the stock on the date of issuance. D) The difference between the par value of stock and the amount below or above par value paid-in by the stockholder. B) An amount assigned to no-par stock by the corporation's board of directors. Stockholders' equity consists of which of the following? A) Long-term assets. B) Paid-in capital and retained earnings. C) Paid-in capital and par value. D) Retained earnings and cash. E) Premiums and discounts. A class of stock that can usually be issued at any price without creating a minimum legal capital deficiency is called: A) Convertible stock. B) No-par stock. C) Callable stock. D) Noncumulative stock. E) Discounted stock.Explanation / Answer
1) The correct option is C) referred to as paid-in 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 (or contributed capital).
2) The correct option is E). Stated value of no par stock is an amount assigned to no-par stock by the corporation's board of directors. Because stated value stock is no par stock to which directors assign a stated value per share.
3) The correct option is B) Paid-in capital and retained earnings. Stockholders' equity consist of paid in capital and retained earnings.
4) The correct option is B) No-par stock because no par value stock can be issued at any price without the possibility of minimum legal capital deficiency.
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