Question 1

If only one class of stock is issued by a corporation,it is referred to as

Accepted Answer

A)  preferred stock. 
B)  company stock. 
C)  treasury stock. 
D)  common stock. 
A)  preferred stock. 
B)  company stock. 
C)  treasury stock. 
D)  common stock.

Question 2

One disadvantage of a corporation is

Accepted Answer

A)  limited liability. 
B)  continuous existence. 
C)  double taxation. 
D)  transferability of ownership rights. 
A)  limited liability. 
B)  continuous existence. 
C)  double taxation. 
D)  transferability of ownership rights.

Question 3

A corporation received a subscription for 1,000 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $103,000 and a credit to

Accepted Answer

A)  Preferred Stock for $100,000 and a credit to Retained Earnings for $3,000. 
B)  Preferred Stock Subscribed for $100,300. 
C)  Preferred Stock Subscribed for $100,000 and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $3,000. 
D)  Preferred Stock Subscribed for $100,000 and a credit to Gain on Sale of Preferred Stock for $3,000. 
A)  Preferred Stock for $100,000 and a credit to Retained Earnings for $3,000. 
B)  Preferred Stock Subscribed for $100,300. 
C)  Preferred Stock Subscribed for $100,000 and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $3,000. 
D)  Preferred Stock Subscribed for $100,000 and a credit to Gain on Sale of Preferred Stock for $3,000.

Question 4

If the issuing corporation retains the right to repurchase the shares of preferred stock from the stockholders at a specified price,the preferred stock is ___________________.

Accepted Answer

The answer of If the issuing corporation retains the right...

Question 5

Preferred Stock is shown in the Stockholders' Equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

A person who signs a(n)____________________ contract agrees to purchase stock and pay for the shares at a later date.

Accepted Answer

The answer of A person who signs a(n)____________________ contract agrees...

Question 7

The entry to record the issuance of 500 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $7,000 and a credit to Common Stock for

Accepted Answer

A)  $5,000 and a credit to Treasury Stock for $2,000. 
B)  $5,000 and a credit to Paid-in Capital in Excess of Par Value-Common Stock for $2,000. 
C)  $5,000 and a credit to Gain on Sale of Common Stock for $2,000. 
D)  $7,000. 
A)  $5,000 and a credit to Treasury Stock for $2,000. 
B)  $5,000 and a credit to Paid-in Capital in Excess of Par Value-Common Stock for $2,000. 
C)  $5,000 and a credit to Gain on Sale of Common Stock for $2,000. 
D)  $7,000.

Question 8

TrustOne Corporation issued 10,000 shares of no-par common stock,$3 stated value in exchange for $45,000.The entry to record the issuance includes a:

Accepted Answer

A)  Debit to Cash for $30,000 and a debit to Paid in Capital in Excess of Stated Value of $15,000. 
B)  Debit to Common Stock for $45,000. 
C)  Credit to Common Stock for $30,000. 
D)  Credit to Common Stock for $45,000. 
A)  Debit to Cash for $30,000 and a debit to Paid in Capital in Excess of Stated Value of $15,000. 
B)  Debit to Common Stock for $45,000. 
C)  Credit to Common Stock for $30,000. 
D)  Credit to Common Stock for $45,000.

Question 9

Profits in the form of ____________________ are paid to the stockholders of a corporation.

Accepted Answer

The answer of Profits in the form of ____________________ are...

Question 10

Stocks may have a(n)___________________,or stated value.

Accepted Answer

The answer of Stocks may have a(n)___________________,or stated value....

Question 11

Organization costs are carried indefinitely as an intangible asset in the records of the corporation.

Accepted Answer

A) True 
 B)False

Question 12

The amount paid for stock in excess of par value is called a(n)___________________.

Accepted Answer

The answer of The amount paid for stock in excess...

Question 13

A corporation has 2,000 shares of 10 percent,$50 par-value preferred stock and 20,000 shares of $5 par-value common stock outstanding.If the board of the directors decides to distribute dividends totaling $80,000,the common stockholders will receive a dividend of

Accepted Answer

A)  $3.50 a share. 
B)  $7.50 a share. 
C)  $8.00 a share. 
D)  $10.00 a share. 
A)  $3.50 a share. 
B)  $7.50 a share. 
C)  $8.00 a share. 
D)  $10.00 a share.

Question 14

When common stock is issued,the par value,or stated value,of the shares issued is recorded in the Common Stock account.

Accepted Answer

A) True 
 B)False

Question 15

Subscriptions Receivable is the control account for the subscribers' ledger.

Accepted Answer

A) True 
 B)False

Question 16

The balance of the Preferred Stock account represents the ____________________ value of the shares issued.

Accepted Answer

The answer of The balance of the Preferred Stock account...

Question 17

The Paid-in Capital in Excess of Par Value-Preferred Stock account would be shown in the

Accepted Answer

A)  Assets section of the balance sheet. 
B)  Stockholders' Equity section of the balance sheet. 
C)  Revenue section of the income statement. 
D)  Expense section of the income statement. 
A)  Assets section of the balance sheet. 
B)  Stockholders' Equity section of the balance sheet. 
C)  Revenue section of the income statement. 
D)  Expense section of the income statement.

Question 18

A corporation has 1,000 shares of 10 percent,$50 par-value preferred stock and 10,000 shares of $5 par-value common stock outstanding.If the board of the directors decides to distribute dividends totaling $40,000,the common stockholders will receive a dividend of

Accepted Answer

A)  $5.00 a share. 
B)  $4.00 a share. 
C)  $3.50 a share. 
D)  $3.75 a share. 
A)  $5.00 a share. 
B)  $4.00 a share. 
C)  $3.50 a share. 
D)  $3.75 a share.

Question 19

A separate Common Stock account is kept in the general ledger for each common stockholder of a corporation.

Accepted Answer

A) True 
 B)False

Question 20

A corporation received a subscription for 200 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $20,600 and a credit to

Accepted Answer

A)  Preferred Stock for $20,000 and a credit to Retained Earnings for $600. 
B)  Preferred Stock Subscribed for $20,000 and a credit to Gain on Sale of Preferred Stock for $600. 
C)  Preferred Stock Subscribed for $20,000 and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $600. 
D)  Preferred Stock Subscribed for $20,600. 
A)  Preferred Stock for $20,000 and a credit to Retained Earnings for $600. 
B)  Preferred Stock Subscribed for $20,000 and a credit to Gain on Sale of Preferred Stock for $600. 
C)  Preferred Stock Subscribed for $20,000 and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $600. 
D)  Preferred Stock Subscribed for $20,600.

Exam 20: Corporations: Formation and Capital Stock Transactions

If only one class of stock is issued by a corporation,it is referred to as

One disadvantage of a corporation is

A corporation received a subscription for 1,000 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $103,000 and a credit to

If the issuing corporation retains the right to repurchase the shares of preferred stock from the stockholders at a specified price,the preferred stock is ___________________.

Preferred Stock is shown in the Stockholders' Equity section of the balance sheet.

A person who signs a(n)____________________ contract agrees to purchase stock and pay for the shares at a later date.

The entry to record the issuance of 500 shares of $10 par-value common stock for $14 a share consists of a debit to Cash for $7,000 and a credit to Common Stock for

TrustOne Corporation issued 10,000 shares of no-par common stock,$3 stated value in exchange for $45,000.The entry to record the issuance includes a:

Profits in the form of ____________________ are paid to the stockholders of a corporation.

Stocks may have a(n)___________________,or stated value.

Organization costs are carried indefinitely as an intangible asset in the records of the corporation.

The amount paid for stock in excess of par value is called a(n)___________________.

A corporation has 2,000 shares of 10 percent,$50 par-value preferred stock and 20,000 shares of $5 par-value common stock outstanding.If the board of the directors decides to distribute dividends totaling $80,000,the common stockholders will receive a dividend of

When common stock is issued,the par value,or stated value,of the shares issued is recorded in the Common Stock account.

Subscriptions Receivable is the control account for the subscribers' ledger.

The balance of the Preferred Stock account represents the ____________________ value of the shares issued.

The Paid-in Capital in Excess of Par Value-Preferred Stock account would be shown in the

A corporation has 1,000 shares of 10 percent,$50 par-value preferred stock and 10,000 shares of $5 par-value common stock outstanding.If the board of the directors decides to distribute dividends totaling $40,000,the common stockholders will receive a dividend of

A separate Common Stock account is kept in the general ledger for each common stockholder of a corporation.

A corporation received a subscription for 200 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $20,600 and a credit to

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analyses

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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