Assume That Retained Earnings Had a Beginning Balance of $75,000

question 154

Multiple Choice

Assume that retained earnings had a beginning balance of $75,000. Match the following amounts to the appropriate term (a-h) .
-Excess of Issue Price over Par (Common) = Excess Price of Common Stock × Number of Shares of Common Stock Issued =
($12 - $2) × 10,000 = $100,000

• A)Treasury stock
• B)Retained earnings
• C)Preferred stock
• D)Excess of issue price over par (preferred)
• E)Common stock
• F)Total paid-in capital
• G)Excess of issue price over par (common)
• H)Total stockholders' equity

---

Definitions:

Allowance for Doubtful Accounts

A financial accounting provision representing the estimated amount of receivables that may not be collected.

Receivables

Amounts owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Accounts Receivable Turnover

A financial ratio that measures how effectively a company collects on its credit sales by dividing total credit sales by the average accounts receivable.

Current Asset

An asset that is expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.