Qdot International Originally Issued 50,000 Shares of Common Stock at a Price

question 11

Multiple Choice

Qdot International originally issued 50,000 shares of common stock at a price of $20 per share. A year later, they distributed a 10% stock dividend to shareholders. At the time of the stock dividend, the share price had gone up to $24 per share. Which of the following statements is TRUE?

• A) Qdot will record sales revenues of $120,000.
• B) Qdot will record a loss of $20,000.
• C) Qdot will record a gain of $20,000.
• D) Qdot will record neither a gain nor a loss.

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Definitions:

Case Study

An in-depth analysis of a single subject, group, event, or situation to explore and understand its complexities in a real-life context.

Generalizability

The extent to which findings from a study can be applied to broader populations, settings, and times.

Construct Validity

The degree to which a test or instrument measures the theoretical construct it is intended to measure.

Face Validity

The extent to which a test or instrument appears to measure what it is supposed to measure, based on a superficial assessment.