The Discount on Common Stock Account Reflects

question 99

Multiple Choice

The Discount on Common Stock account reflects:

• A)The difference between the par value of stock and its issue price when it is issued at a price below par value.
• B)One share's portion of the issued corporation's net assets recorded in its accounts.
• C)The difference between the par value of the stock and the amount paid-in by stockholders when the amount paid-in is more than par value.
• D)An amount of assets defined by state law that stockholders must invest and leave invested in a corporation.
• E)The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock.

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Definitions:

Shareholders

Individuals or entities that own shares in a company, thus holding a portion of the company's ownership and sometimes entitled to dividends and a say in company decisions.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or project.

Statute of Frauds

Legal regulation requiring certain kinds of contracts to be written and signed to be enforceable.

Anticipatory Agreement

A contract in which the parties acknowledge and accommodate the future performance of an obligation before its due.