If a Corporation Issues 5,000 Shares of $5 Par Value

question 1

Multiple Choice

If a corporation issues 5,000 shares of $5 par value common stock for $95,000,the journal entry would include a credit to:

• A)Common Stock for $95,000.
• B)Paid-in Capital in Excess of Par-Common for $95,000.
• C)Common Stock for $70,000.
• D)Paid-in Capital in Excess of Par-Common for $70,000.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Average Sales Period

The average amount of time it takes for a company to sell its inventory, which can reflect its inventory management efficiency.

Liquidity

The ability of an entity to quickly convert its assets into cash or to pay off its current liabilities.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects money owed from its customers over a period.