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1. The document used by a state to grant permission to form a corporation is called a:

a) charter

b) proxy

c) stock certificate

d) bylaw agreement

2. Retained earnings:

a) is classified as a liability on the corporate balance sheet

b) does not appear on any financial statement

3. A corporation may issue:

a) preferred stock but not common stock

b) common stock and preferred stock

c) common stock but not preferred stock

d) either common or preferred but not both

c) represents capital that the corporation has earned through profitable operations

d) represents investments by the stockholders of a corporation

4. A corporation issues 1,800 shares of $10 par value common stock In exchange for land with a current market value of $23,000. The land account would be:

a) debited for $23,000

b) credited for $18,000

c) credited for $20,000

d) debited for $18,000

5. The entry to record the issuance of 5,000 shares of $10 par common stock for $13 per share includes a:

a) debit to cash for $50,000

b) debit to paid-in capital in excess of par-common for $65,000

c) credit to common stock for $65,000

d) debit to cash for $65,000

6. The entry to record the issuance of 55,000 shares of no-par common stock at $13.50 per share includes a:

a) credit to paid-in capital in excess of no-par value-common for $742,500

b) credit to common stock for $742,500

c) credit to cash for $742,500

d) debit to paid-in capital in excess of no-par value-common for $742,500

7. Duncan Lumber Corporation records the following journal entry on November 1, 20X5:

General Journal

Date	Accounts	Debit	Credit
Nov. 1	Cash	39,375
	Common Stock		26,250
	Paid-in Capital in Excess of Par-Common		13,125

The stock was issued for $75 per share. What is the par for this stock, and how many shares were issued?

a) $25 par, 525 shares

b) $50 par, 525 shares

c) $75 par, 350 shares

d) $25 par, 350 shares

8. Jolly Corporation has the following journal entry recorded on June 15 of the current year:

General Journal

Date	Accounts	Debit	Credit
June 15	Cash	27,000
	Common Stock		18,000
	Paid-in Capital in Excess of Par-Common		9,000

The stock was sold for $60 per share. What is the par of the stock, and how many shares were sold?

a) $60 par and 300 shares

b) $20 par and 450 shares

c) $40 par and 300 shares

d) $40 par and 450 shares

9. Sci Works Corporation exchanges a piece of land for 600 shares of Fighter Corporations common stock with a par of $30 per share. The land had cost Sci Works Corporation $10,000 years ago, and currently has a fair market value of $29,000. What is the total increase to paid-in capital for Fighter Corporation as a result of this exchange?

a) $29,000

b) $28,000

c) $18,000

d) $10,000

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