AC/113 AC113 AC 113 UNIT 10 QUIZ

 1.

Question :

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Student Answer:

 True

 False

Question 2.

Question :

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Student Answer:

 True

 False

Question 3.

Question :

If the market rate of interest is 8% and a corporation's bonds bear interest at 7%, the bonds will sell at a premium.

Student Answer:

 True

 False

Question 4.

Question :

In which section of the balance sheet would treasury stock be reported?

Student Answer:

 Fixed assets

 Long-term liabilities

 Stockholders' equity

 Intangible assets

Question 5.

Question :

When the market rate of interest on bonds is equal to the contract rate, the bonds will sell at:

Student Answer:

 a premium.

 their face value.

 a discount.

 a discount or a premium.