Using the Following Accounts

question 22

Multiple Choice

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transaction.
-Sold common stock at a price above the par value.
Debit ________ Credit ________ & ________

• A)Subscription receivable-common stock
• B)Cash
• C)Machinery
• D)Building
• E)Land
• F)Organization costs
• G)Preferred stock
• H)Common stock
• I)Paid in capital in excess of par value - common
• J)Paid in capital in excess of par value - preferred
• K)Common stock subscribed
• L)Discount on common stock
• M)Organization Expense

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue is contributing to fixed costs and profits.

Unsold Units

Unsold units refer to products that have been produced or acquired by a business but have not yet been sold to customers.

Variable Costing

A costing method that only includes variable production costs—costs that change with the level of output—in product pricing.

Unsold Units

Inventory items that have not been sold during a specific period, representing stock still available for sale.