Answer the following statements true (T) or false (F)

Question

1) Stated value stock is no-par stock that has been assigned an amount similar to par value.
2) Retained earnings represents amounts received from stockholders of a corporation in exchange for
stock.
3) Par value is an arbitrary amount that is assigned by the state when the corporate charter is issued.
4) For accounting purposes, par value stock is treated the same as stated value stock except for the
account names.
5) The par value of a stock has no relation to the market value.

Answer 1

1) TRUE
2) FALSE
3) FALSE - Par value is an arbitrary amount that is assigned when the organizers file the corporate charter with the state.
4) TRUE
5) TRUE