When Common Stock Is Issued for Services or Non-Cash Assets

question 167

Multiple Choice

When common stock is issued for services or non-cash assets cost should be

• A) only the fair value of the consideration given up.
• B) only the fair value of the consideration received.
• C) the book value of the common stock issued.
• D) either the fair value of the consideration given up or the consideration received whichever is more clearly evident.

Understand the function and maintenance of the accounts payable subsidiary ledger.

Comprehend the relationship and reconciliation between the accounts payable controlling account and the accounts payable subsidiary ledger.

Develop skills in preparing general journal entries for merchandise purchases, including those with freight costs and returns.

Understand the characteristics of secondary data in research.

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Definitions:

Uncollectible Accounts

Accounts receivable that a business does not expect to collect and writes off as a loss.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Uncollectible Accounts

Uncollectible accounts are debts owed to a company that are considered uncollectable and are written off as a bad debt expense.