Using the Following Accounts

question 103

Multiple Choice

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transaction.
-Issued fully paid common stock.
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:

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C-corp

A corporation in the United States that is taxed separately from its owners, known as shareholders, under the subchapter C of the Internal Revenue Code.

S-corp

A specific designation for a corporation that allows income, losses, deductions, and credits to be passed through to shareholders for federal tax purposes, avoiding double taxation.

Double Taxation

The financial imposition where income taxes are paid twice on the same source of earned income, often in the context of corporate profits taxed both at the corporate level and again when distributed as dividends.