Different Classes of Stocks Are Usually Issued in Order To

question 35

Multiple Choice

Different classes of stocks are usually issued in order to:
I.maintain ownership control,by holding the class of stock with greater voting rights;
II.pay less dividends to different classes of stock;
III.extract perquisites without the other class of stockholders knowing

• A)I only
• B)II only
• C)III only
• D)I and II only

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Definitions:

Subsidiary Ledger

A detailed ledger that contains all the transaction details of a specific account, which then summarizes into the general ledger.

Long-term Liability

Financial obligations that are due after a period of more than one year, such as bonds payable or long-term loans.

Cost Method

An accounting method used to value inventory or investments, where the cost of the goods or the investment purchase price is the basis for the value on the balance sheet.

Long-term Investments

Generally, (1) investments in stocks and bonds of other companies that companies normally hold for many years, and (2) long-term assets, such as land and buildings, not currently being used in operations.