The Entry to Record the Issuance of 150 Shares of $5

question 143

Multiple Choice

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to

• A) Organizational Expenses
• B) Goodwill
• C) Common Stock
• D) Cash

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Definitions:

Variable Overhead

Costs that change in proportion with production volume or business activity levels, such as utilities or raw materials.

Labour Rate Variance

Labour rate variance is the difference between the actual hourly wage paid to workers and the standard wage rate expected, indicating variations in labor cost.

Material Quantity Variance

The difference between the actual quantity of materials used in production and the expected quantity, multiplied by the standard cost per unit.

Standard Costing

An accounting method that uses predetermined costs for product costing, performance evaluation, and decision making.