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

question 121

Multiple Choice

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

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

Describe the purpose and effects of antitrust laws on market competition and consumer welfare.

Articulate the tension between cooperation and self-interest among firms in an oligopolistic market and the role of cartels.

Evaluate the strategic considerations of firms considering market entry or expansion, taking into account potential competitive responses.

Understand the concept of the demand schedule and how it relates to product pricing.

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Definitions:

First-In, First-Out Method

This is an inventory valuation method where goods first added to inventory are the first ones to be sold.

Equivalent Units

A concept used in cost accounting to assign costs to partially completed goods, expressed in terms of fully completed units.

Conversion Costs

The sum of direct labor and manufacturing overhead expenses involved in turning raw materials into completed goods.

Direct Method

A cash flow statement preparation method that lists major categories of gross cash receipts and payments, directly showing sources and uses of cash.