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Skousen Practice 3 - Copy

Skousen Practice 3 - Copy - ACCT 5010 Intermediate...

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ACCT 5010 Intermediate Accounting II Practice Test, Chapter 11 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Stock warrants outstanding should be classified as a. liabilities. b. reductions of capital contributed in excess of par value. c. capital stock. d. additions to contributed capital. ____ 2. When treasury stock is purchased for cash at more than its par value, what is the effect on total stockholders' equity under each of the following methods? Cost Method Par Value Method ____ 3. Five thousand shares of common stock with a par value of $10 per share were issued initially at $12 per share. Subsequently, 1,000 of these shares were acquired as treasury stock at $15 per share. Assuming that the par value method of accounting for treasury stock transactions is used, what is the effect of the acquisition of the treasury stock on each of the following? Additional Retained Paid-In Capital Earnings ____ 4. When a portion of stockholders' original investment is returned in the form of a dividend, it is called a
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