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c. market value of the shares issued.
d. Any of these provides an appropriate basis for recording the
transaction.
31. Direct costs incurred to sell stock such as underwriting costs
should be accounted for as
1. a reduction of additional paid-in capital.
2. an expense of the period in which the stock is issued.
3. an intangible asset.
a. 1
b. 2
c. 3
d. 1 or 3
32.
A "secret reserve" will be created if
a. inadequate depreciation is charged to income.
b. a capital expenditure is charged to expense.
c. liabilities are understated.
d. stockholders' equity is overstated.
P33. Which of the following represents the total number of shares
that a corporation may issue under the terms of its charter?
a. authorized shares