IFRS questions are available at the end of this chapter.
TRUE-FALSE— Conceptual
1. A corporation is incorporated in only one state regardless of the number of states in which it operates.
2. The preemptive right allows stockholders the right to vote for directors of the company.
3. Common stock is the residual corporate interest that bears the ultimate risks of loss.
4. Earned capital consists of additional paid-in capital and retained earnings.
5. True no-par stock should be carried in the accounts at issue price without any additional paid-in capital reported.
6. Companies allocate the proceeds received from a lump-sum sale of securities based on the securities’ par values.
7. Companies should record stock issued for services or noncash property at either the fair value of the stock issued or the fair value of the consideration received.