Which of the Following Is Not True

question 33

Multiple Choice

Which of the following is not true?

• A)Firms issue common stock for assets other than cash, for example, to acquire another firm.
• B)Firms generally issue common shares, both at the time of initial incorporation and in subsequent years, for amounts greater than par (or stated) value.
• C)The firm records the shares exchanged for noncash assets at the fair value of the shares given or, if the firm cannot make a reasonable estimate, at the fair value of the assets received.
• D)Firms may issue capital stock (preferred or common) for cash or for noncash assets.
• E)Firms generally issue preferred shares, both at the time of initial incorporation and in subsequent years, for amounts greater than par (or stated) value.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, due to higher market prices.

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country, often used to protect domestic industries.

Tariff

A tax imposed on imported goods and services to increase their price and reduce competitiveness with domestic products.

Country

A defined geographic area or political unit acknowledged as a sovereign state.