1)If a bond is issued at 98% of its face value, the stated rate of interest was

a)lower than the market rate of interest.

b)

higher than the market rate of interest.

c)

not related to the market rate of interest.

d)

equal to the market rate of interest.

2)What is the general principle for capitalizing costs to property, plant and equipment?

	a)All costs associated with the acquisition or construction of a plant asset are capitalized
	b)All costs incurred to bring the item to its intended condition and location are capitalized.
	c)Only depreciable costs are capitalized
	D)All costs, which will provide a benefit beyond one year, are capitalized

3)Zygo sold 1,000 common shares (par $3/ Face value) at $5 per share. The entry to record this transaction included a credit to:

	a)Subscriptions receivable.
	b)Contributed capital in excess of par.
	c)Accounts receivable
	d)Cash.

4)Which of the following statements does not accurately describe the effect of the sale of inventory at a profit on the financial statements?

	a)Net income and earnings per share both increase.
	b)Current assets do not change and stockholders' equity increases.
	c)Operating income and gross profit both increase.
	d)Income from operations and current assets both increase.