chapter 13 t/f Flashcards
a corporation is a legal entity separate and distinct from its owners
t
a successful corporation can have a continuous and perpetual life
t
stockholders have the right ot directly formulate operating policies for the company
f
an advantage of a corporation is that it is subject to very few governmental regulations
f
the issuance of the charter, often referred to as the articles of incorporation, creates the corporation
t
organizational costs are capitalized by debiting an intangible asset entitled organizational costs
f
the amount of stock that a corporation is authorized to sell is indicated in its charter
t
upon the authorization of capital stock, a corporation will record a debt for the asset acquired and a credit to common stock
f
par value is indicative of the worth or market value of the stock
f
the cash proceeds from issuing par value stock may be equal to , or grater than but no less than par value
f
when no par stock has a stated value, the entire proceeds from the issue are credited to common stock
f
the cost of a noncash asset acquired in exchange for common stock should be either the fair market value of the consideration given up or the consideration received, whichever is more clearly determinable
t
when stock is issued for noncash assets, the par value of the stock is never a factor in determining the cost of the assets received
t
under the cost method, treasury stoc is debited at the prie paid to reacquire the shares, and the same amount is credited to treasury stock when the shares are sold
t
treasury stock is a contra stockholders equity account
t
