When No-Par Stock Is Issued

question 40

Multiple Choice

When no-par stock is issued:

• A)The entire amount received is credited to the Additional Paid-in Capital account.
• B)The issue price is credited to the Capital Stock account.
• C)There is no legal capital created because there is no par or stated value.
• D)The transaction usually involves only an exchange for non-cash assets or services,since the stock has no value on the stock exchanges.

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Definitions:

Shipping Cost

Expenses associated with the transportation of goods from one place to another.

Net Sales

Total sales revenue minus returns, allowances for damaged or missing goods, and discounts.

Sales Discounts

Sales discounts are reductions in the price of a product or service offered by a seller to a buyer, usually to encourage prompt payment or bulk purchases.

Sales Returns

Transactions involving the return of sold goods by customers to the seller for a refund or credit, often due to defects or dissatisfaction.