78.Which of the following transactions will not change a company's total stockholders' equity?
A. Reporting of net income.
B. Issuing stock to stockholders in exchange for cash.
C. The declaration of a cash dividend.
D. The purchase of a factory building.
79.Alpha Company issued 1,000 shares of $10 par value common stock to stockholders, in exchange for $15,000 cash. Which of the following correctly describes the impact of this transaction on Alpha's financial statements?
A. A $15,000 investment is reported as a long-term investment.
B. Stockholders have invested $25,000 as stockholders' equity.
C. Common stock is reported at $15,000 in stockholders' equity.
D. Additional paid-in capital of $5,000 is reported in stockholders' equity.
80.Which of the following statements is incorrect?
A. Stockholders' equity accounts normally have credit balances.
B. Liability accounts are decreased by credits.
C. Stockholders' equity accounts are increased by credits.
D. Asset accounts are increased by debits.
81.Selling stock to investors for cash would result in which of the following?
A. A debit to additional paid-in capital and a credit to cash.
B. A credit to both cash and additional paid-in capital.
C. A debit to cash and a credit to common stock.
D. A debit to cash and a credit to the investment account.
82.Borrowing cash from a bank would result in which of the following?
A. A debit to cash and a credit to notes payable.
B. A debit to notes payable and a credit to cash.
C. A debit to both cash and notes payable.
D. A debit to cash and a credit to additional paid-in capital.
Cash is received and increased with a debit; the loan from the bank is recognized with a credit to notes payable.
83.Which of the following journal entries is correct when common stock is sold for cash at a price greater than par value?
Retained earnings xxx
Additional paid-in capital xxx
Common Stock xxx
Common stock xxx
Additional paid-in capital xxx
84.Which of the following statements is ?
A. The common stock account has a credit balance.
B. The additional paid-in capital account has a credit balance.
C. Common stock may be issued for more than par value.
D. The par value of common stock represents the stock's market value.
85.A company purchases a delivery van by paying $5,000 cash and by signing a $25,000 note payable. Which of the following correctly describes the recording of the delivery van purchase?
A. The delivery van account is debited for $25,000.
B. Notes payable is debited for $25,000.
C. The delivery van account is debited for $30,000.
D. Cash is debited for $5,000.
86.Cadet Company paid an accounts payable of $1,000. This transaction should be recorded on the payment date as follows:
A. Accounts payable1,000
Accounts payable 1,000
C. Notes Payable1,000
Cost of Goods Sold 1,000
87.Centex, Inc. issued 50,000 shares of its $1 par value common stock for $20 per share. The journal entry to record the stock issue would include which of the following?
A. A credit to cash for $1,000,000.
B. A credit to additional paid-in capital for $1,000,000.
C. A credit to additional paid-in capital for $50,000.
D. A credit to common stock for $50,000.