In Many States, the Minimum Amount That Stockholders Must Contribute

question 125

Multiple Choice

In many states, the minimum amount that stockholders must contribute to the corporation, and which is intended to protect the creditors of the corporation, is called the:

• A) Minimum legal capital.
• B) Par value of preferred.
• C) Stated value.
• D) Premium capital.
• E) Working capital.

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Definitions:

Accrued Revenues

Revenues earned in an accounting period that have not yet been received in cash or recorded at the statement date.

Unearned Rent

Income received for rent before the rental period has occurred, classified as a liability until the services (rental period) are performed.

Accrued Salaries

Salaries that have been earned by employees but have not yet been paid by the employer, recognized as a liability on the balance sheet.

Journal Entry

A record in the books of accounts that documents a business transaction in terms of debits and credits.