ACC 304 Course Great Wisdom / tutorialrank.com ACC 304 Course Great Wisdom / tutorialrank.com | Page 327
7. Companies should record stock issued for services or
noncash property at either the fair value of the stock issued or
the fair value of the consideration received.
8. Treasury stock is a company’s own stock that has been
reacquired and retired
9. The cost method records all transactions in treasury
shares at their cost and reports the treasury stock as a deduction
from capital stock.
10. When a corporation sells treasury stock below its cost, it
usually debits the difference between cost and selling price to
Paid-in Capital from Treasury Stock.
11. Participating preferred stock requires that if a company
fails to pay a dividend in any year, it must make it up in a later
year before paying any common dividends.
12. Callable preferred stock permits the corporation at its
option to redeem the outstanding preferred shares at stipulated
prices.