Kristine Parsons Owns 2,000 Shares of $1

question 48

Multiple Choice

Kristine Parsons owns 2,000 shares of $1.00 par value capital stock of Garments 4 You.Kristine sold 100 of these shares to Beverly Plito for $200.The effect of this transaction on the accounts of Garments 4 You would be to

• A)increase the capital stock account by $1,800 and increase the cash account by $1,800.
• B)increase the capital stock account by $200,increase the paid-in capital in excess of par account by $2,000,and increase the cash account by $1,800.
• C)decrease the capital stock account by $1,800 and increase the paid-in capital in excess of par account by $1,800.
• D)increase the capital stock account by $1,800 and decrease the paid-in capital in excess of par account by $1,800.
• E)There is no effect from this transaction on the accounts of Garments 4 You.

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Definitions:

Optically Active

Refers to substances capable of rotating the plane of polarized light due to the presence of chiral molecules.

Bromine Water

An aqueous solution of bromine used as a reagent to test for the presence of unsaturation in organic compounds.

Aldaric Acid

A type of sugar acid resulting from the oxidation of both the aldehyde and primary alcohol groups of an aldose.

Optically Active

A property of compounds that have the ability to rotate plane-polarized light, indicating the presence of chiral molecules.