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MULTIPLE CHOICE

$6.$ Which of the following best represents the accounting equation for a corporation?

a$.$ Assets $=$ Liabilities $+$ Paid$-$In Capital

b$.$ Asset $=$ Liabilities $+$ Treasury Stock

c$.$ Assets $=$ Liabilities $+$ Retained Earnings

d$.$ Assets $=$ Liabilities $+$ Stockholders$$ Equity

$7.$ The two basic types of capital stock are

a$.$ cumulative preferred stock and participating preferred stock.

b$.$ cumulative common stock and participating common stock.

c$.$ common stock and preferred stock.

d$.$ participating common stock and participating preferred stock.

$8.$ Hill Corporation issued $2,000$ shares of $$10$ par common stock to various investors for $$13$ per share. To record this transaction, it is necessary to credit the

a$.$ Common Stock account for $$26,000.$

b$.$ Common Stock account for $$20,000$ and the Paid$-$In Capital in Excess of Par$$Common account for $$6,000.$

c$.$ Paid$-$In Capital in Excess of Par$$Common account for $$26,000.$

d$.$ Common Stock account for $$20,000$ and the Cash account for $$6,000$

$9.$ Fleming Corporation sells $800$ shares of its $$5$ par value common stock for $$21$ a share. The journal entry will involve a

a$.$ debit to the Cash account for $$16,800.$

b$.$ debit to the Paid$-$In Capital in Excess of Par$$Common account for $$12,800.$

c$.$ debit to the Paid$-$In Capital in Excess of Par$$Common account for $$4,000.$

d$.$ credit to the Paid$-$In Capital in Excess of Par$$Common account for $$4,000.$

$10.$ Washington Financial Corporation reacquires $10,000$ shares of its $$5$ par common stock for $$9$ per share. The journal entry will include a

a$.$ debit to the Common Stock account for $$90,000.$

b$.$ credit to the Common Stock account for $$90,000.$

c$.$ credit to the Paid$-$In Capital in Excess of Par$$Common account for $$40,000.$

d$.$ debit to the Treasury Stock account for $$90,000$

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