1.If a stock is sold on the secondary market between one investor and another, what effect does that have on the financial statements of the company that originally issued the stock?

		Its revenues increase
		Its "in excess" equity increases
		It has a new asset
		There is no effect since the sale or trade is among investors only

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2.

QUESTION 10

Which of the following is an advantage of the corporate form of business organization?

double taxation

amount of regulation

limited liability

entrenched management

3.

Ownership and profit distribution in a sole proprietorship are generally seen on its balance sheet respectively as

A personal capital account and dividends

Common stock and dividends

Common stock and withdrawals

A personal capital account and withdrawals

4.

QUESTION 12

A major difference between common and preferred stock is that usually

Common stockholders receive dividends before preferred

Common stockholders can vote and preferred cannot

Preferred stockholders can only be other institutions and not individuals

Common stockholders have unlimited liability and preferred do not

5.If common stock is issued and sold as "no par"

		It is treated as preferred stock
		It becomes a liability account
		An "additional paid in capital (in excess)" will be recorded
		An "additional paid in capital (in excess)" will not be recorded