6.

Use the following partial balance sheet to determine the number of common shares outstanding.

• 50,000 shares

• 9,000,000 shares

• 100,000 shares

• 25,000 shares

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7.

Faraway Company is leasing a machine that meets the requirements of a capital lease. The fair value of the machine is $21,000, the annual payments are $6,200, and the expected rate of return is 7%. Calculate the amount of interest and principle for the first year's payment.

• $1,470 interest and $6,200 principle

• $1,470 interest and $4,730 principle

• $0 interest and $6,200 principle

• $4,730 interest and $1,470 principle

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8.

In addition to recording the lease payment made on a capital lease, the lessee must also record which of the following?

• Depreciation

• Increase in asset value

• Amortization

• Fair value adjustment

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9.

What is another term for an unsecured bond?

• Bearer bond

• Mortgage

• Registered bond

• Debenture

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10.

If a company liquidates due to closing its business operations, what is the order of priority for distributing the net assets?

• Preferred shareholders first, common shareholders next, creditors last

• Creditors first, preferred shareholders next, common shareholders last

• Preferred shareholders first, creditors next, common shareholders last

• Creditors first, common shareholders next, preferred shareholders last