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QUESTION 17 Outstanding shares represent the 1. maximum number of shares that can be sold by the corporation. 2. number of shares that are currently held by stockholders. 3. number of previously issued shares that have been repurchased by the corporation. 4.number of shares that the corporation has sold. QUESTION 18 The Discount on Bonds Payable account is shown on the balance sheet as 1. an asset. 2. an expense. 3. a contra-liability account that reduces the bond to market value at the issue date. 4.a long-term liability. QUESTION 19 When bonds are issued by a company, the accounting entry shows an 1. increase in assets and an increase in stockholders' equity. 2. increase in liabilities and an increase in stockholders' equity 3. increase in assets and an increase in liabilities. 4. increase in liabilities and a decrease in stockholders' equity QUESTION 20 Bonds sell at a premium when the 1. market rate of interest is less than the stated interest rate at the time of issue. 2. issuing company has a better reputation than other companies in the same business. 3. yield rate of interest is more than the stated rate at the time of issue. 4. issuing company agrees to repay the maturity before the due date

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