Question

7. The current ratio and quick ratio analysis can belp creditors can ability to pay its current liabilities A True B. False creditors evaluate a company's 8. Which of the following is a characteristic of a corporation? A A corporation has a limited life. B. A corporation is not taxed on the corporation's business income. C. The owners of a coronation have limited liability for the corporation D. All of the above ll outstanding 9. Shares of stock that has been authorized to be sold to stockholders are call outstanding shares A True. B. False. 10. What types of stock can a corporation issue? A Treasury Stock and a stock dividend. B. Common stock can be issued but not preferred stock. C. Preferred stock can be issued but not common stock D. Both common stock and preferred stock can be issued 11. The par value of common stock represents A. The market value of common stock. B. An arbitrary value assigned to a share of corporate stock. C. The purchase price of all common stock. D. None of the above. 12. Stated value is an amount assigned to no-par stock by the board of directors. A True B. False. 13. The charter of a corporation provides for the authorization of 100,000 shares of common stock. Assume that 60,000 shares were issued and 10,000 shares were subsequently reacquired. What is the number of shares outstanding? A. 10.000. B. 70,000. C. 60,000 D. 50,000. 14. Which of the following is true about treasury stock? A. Stock that is reported in the financial statements as an asset. B. Stock that is reported in the financial statements as outstanding. C. Stock that a corporation has issued and then reacquired. D. All of the above.

Answer 1

Q7) A) TRUE As this ratios is used to get the current and liquild payoff power of the orgination. Q8) C) The owner of a corporate have limited liability for the corporation debts. Because the corporate is a saparate legal entiry than its owner. And owner is liabilite upto his outsanding part of share capital, not more than that. Q9) B) False It is called authorised capital. Q10) D) both common stock and preferred stock can be issued. corporate can issue both type of share. Q11) B) The arbitrary Value assigned to a share of corporate stock. it's the nominal value or face value which is assigned to share. Q12) A) true it's the arbitrary value assigned by board of director to no-par stock Q13) D) 50000 as the outstanding shares = 60000-10000=50000 14) C) Stock that a corporation has issued and then required. As Treasury stock are those stock which corporation has reacquired from stockholders.