Answer the following statements true (T) or false (F)
1. When stock is issued for assets other than cash, the transaction is always recorded at the market value of the stock issued.
2. When stock is issued for assets other than cash, the transaction is recorded at the market value of the
stock issued or the market value of the assets received, whichever is more clearly determinable.
3. Preferred Stock is included in the long-term assets section of the balance sheet.
4. If preferred stock is issued for an amount above the par value, the amount of the par value times the
number of shares issued is credited to Paid-In Capital in Excess of Par—Preferred.
5. Preferred Stock is included in the stockholders' equity section of the balance sheet and is often listed
after Common Stock.
1. FALSE - Explanation: When stock is issued for assets other than cash, the transaction is recorded at the market value of the stock issued or the market value of the assets received, whichever is more clearly determinable.
2. TRUE
3. FALSE - Preferred Stock is included in the stockholders' equity section of the balance sheet
4. FALSE Explanation: The amount is credited to Preferred Stock.
5. FALSE - Explanation: Preferred Stock is included in the stockholders' equity section of the balance sheet and is often listed first.
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