Multiple choice

1) If the market rate of interest is 6% and the coupon rate of interest is 7%, the bond will set at a:

A. A discount

B. At par

C. At a premium

D. Cannot be determined

2) What type of account classification is a bond?

A. Asset

B. Liability

C. Revenue

D. Equity

3) When a corporation purchases shares of its own stock, it is called:

A. Illegal

B. Fraud

C. Treasury Stock

D. Common Stock

4) On December 31, 2010, Halladay Corporation sold an asset that had a cost of $30,000 and accumulated depreciation of $28,000 for $6,000. This transaction results in:

A. A gain of $4,000

B. A loss of $4,000

C. A gain of $6,000

D. A loss of $2,000