Which of the following is not a characteristic of a corporation?

A. Double taxation

B. Mutual agency

C. Unlimited liability

D. One or more owners

2.What is the effect of the purchase of treasury stock?

A. Decrease the number of shares outstanding.

B. Decrease the number of shares issued.

C. Increase the number of shares issued.

D. Both A and B are correct.

3.Which of the following transactions result in a decrease in stockholders equity?

A. Sale of treasury stock

B. Small stock dividend

C. Cash dividend

D. All of the above

4.A stock dividend:

A. decreases Common Stock.

B. increases Total Equity.

C. decreases Total Equity.

D. decreases Retained Earnings.

5.Affordable Garden Imports issued 500,000 shares of $1 par common stock at $5 per share. Which journal entry correctly records the issuance of this stock?

	Accounts and Explanations	Debit	Credit
A.	Common Stock	500,000
	Paid-In Capital in Excess of ParCommon	2,000,000
	Cash		2,500,000
B.	Cash	2,500,000
	Common Stock		500,000
	Paid-In Capital in Excess of ParCommon		2,000,000
C.	Common Stock	2,500,000
	Cash		2,500,000
D.	Cash	2,500,000
	Common Stock		2,500,000