1

When using the percentage of accounts receivable method of estimating uncollectible accounts, any existing balance in Allowance for Uncollectible Accounts is ignored.

True

False

2

Contingent liabilities often result from lawsuits.

True

False

3

Both a company's credit terms and collection policies affect accounts receivable turnover.

True

False

4

An example of a contingent liability is:

	A.	salaries payable.
	B.	federal excise tax payable.
	C.	accounts payable.
	D.	potential loss from a lawsuit.

5

The par value of a share of common stock is:

	A.	the amount at which, according to some state laws, the share must be first issued.
	B.	a changing amount which varies according to earnings and losses of the issuing corporation.
	C.	the amount for which the stock can be sold in the market.
	D.	generally of little significance, being merely a nominal and arbitrary amount printed on a stock certificate.

6

The date of record (of dividends) is the date established by the board of directors to determine who will receive a dividend.

True

False

7

The preemptive right refers to a stockholder's right to receive dividends when they are declared by the board of directors.

True

False

8

When a statement of stockholders' equity is prepared, it replaces the statement of retained earnings.

True

False