When a Corporation Sells Some of Its Own Common Shares,all

question 147

Multiple Choice

When a corporation sells some of its own common shares,all on credit,there should be a debit to the account:

• A) Subscriptions receivable, common.
• B) Accounts receivable.
• C) Cash.
• D) Notes receivable, common.

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Definitions:

Rate of Inflation

The Rate of Inflation measures the percentage increase in the general price level of goods and services in an economy over a period of time.

Real Rate of Return

The annual percentage return realized on an investment, adjusted for changes in the price level due to inflation or other external effects.

Annual Interest Rate

The percentage of a sum of money charged for its use, calculated on an annual basis.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, hence, eroding purchasing power.