1. The methodology for accounting for investments in another company's common stock is determined by _________.

		The number of shares owned
		The percentage of the other company's outstanding shares that are owned
		The market price of the other company's common shares
		How long your company intends to own the other company's shares

2. ABC Company had the following transactions and events related to its $1 par common stock during the 20XX business year:

On January 1st, the board of directors authorized the issuance of 1,000,000 shares of $1 par common stock

On January 2nd, ABC Company issued 250,000 shares of previously authorized $1 par common stock.

On April 1st, ABC Company repurchased 150,000 shares of previously issued $1 par common stock.

On July 1st, ABC Company resold 100,000 shares of its own $1 par common stock from its treasury.

On October 1st, ABC Company issued another 300,000 shares of previously authorized $1 par common stock.

On December 1st, ABC Company declared a $.50 per share cash dividend on it's outstanding common shares. What total amount of cash dividends would ABC Company have to create a liability for at the time of this declaration?

		$100,000
		$250,000
		$275,000
		$400,000

3. The journal entry to account for the issuance of 50,000 shares of $100 par, 10% preferred stock at a market price of $120 per share would contain which of the following?

		A debit to cash for $500,000
		A debit to cash for $600,000
		A credit to preferred stock-$100 par for $600,000
		A credit to PIC-Preferred for $500,000

4. During the 20XX business year, ABC Company reported $2,000,000 of net income. What section of the statement of cash flows would this appear under?

		Operating
		Investing
		Financing
		Non-cash

5. The journal entry to record a monthly payment on a mortgage will always contain a _____________.

		Debit to cash
		Credit to cash
		Debit to interest payable
		Credit to mortgages payable

6. Company A owns 10,000 shares of Company B's common stock. On March 31st, Company B paid a $0.10 per share dividend. Company A's journal entry to account for this dividend would contain a __________.

Debit to cash dividends for $1,000

Credit to dividend revenue for $1,000

Debit to dividend revenue for $10,000

Credit to dividends payable for $10,000