If Norben Company Issues 6,000 Shares of $5 Par Value

question 148

Multiple Choice

If Norben Company issues 6,000 shares of $5 par value common stock for $210,000, the account

• A)Common Stock will be credited for $210,000.
• B)Paid-in Capital in Excess of Par Value will be credited for $30,000.
• C)Paid-in Capital in Excess of Par Value will be credited for $180,000.
• D)Cash will be debited for $180,000.

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Definitions:

Normal Credit Period

A standard duration agreed upon in business transactions, during which a buyer can pay the seller for goods or services without penalty.

Optimal Amount of Credit

The ideal level of borrowing that achieves a balance between the benefits and costs of debt financing.

Total Opportunity Cost

The sum of all the benefits that could have been received from the next best alternative option that was not chosen.

JIT Point

A strategy where materials, goods, and even labor are delivered or acquired just in time to be used, reducing storage and inventory costs.