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4) The par value of stock is: A) the price paid if the corporation purchases its own stock back. B) the amount assigned by a company to a share of its stock. C) the highest price for which a share can sell. D) the current selling price of stock. 5) Which of the following occurs when a 2-for-1 stock split is declared? A) The balance in common stock doubles. B) The balance in common stock is reduced to half the original amount. C) The balance in common stock remains the same D) The balance in paid-in capital doubles. 6) On March 1, 2015, Vinnie Services issued a 5% long-term notes payable for $15,000. It is payable over a 3-year term in $5,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2016. How will this information be shown on the balance sheet dated December 31, 2015? 2 A) $5,000 shown as current liability: $15,000 shown as long-term liability B) $15,000 shown as current liability only C) the entire $15,000 shown as long-term liability D) $5,000 shown as current liability; $10,000 shown as long-term liability 7) Which of the following is a reason for a company to announce a stock split? A) to provide the shareholders with something of value, when the company cannot afford a cash dividend B) to defend against a hostile takeover C) to double the par value of the share D) to reduce the market price at which the stock is trading

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