Question 1

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Accepted Answer

A)  Common Stock will be credited for $45,000. 
B)  Paid-in Capital in Excess of Par will be credited for $45,000. 
C)  Paid-in Capital in Excess of Par will be credited for $160,000. 
D)  Cash will be debited for $115,000. 
A)  Common Stock will be credited for $45,000. 
B)  Paid-in Capital in Excess of Par will be credited for $45,000. 
C)  Paid-in Capital in Excess of Par will be credited for $160,000. 
D)  Cash will be debited for $115,000.

Question 2

Treasury stock should be reported in the financial statements of a corporation as a(n)

Accepted Answer

A)  investment. 
B)  liability. 
C)  deduction from total paid-in capital. 
D)  deduction from total paid-in capital and retained earnings. 
A)  investment. 
B)  liability. 
C)  deduction from total paid-in capital. 
D)  deduction from total paid-in capital and retained earnings.

Question 3

Which one of the following is not necessary in order for a corporation to pay a cash dividend?

Accepted Answer

A)  Adequate cash 
B)  Approval of stockholders 
C)  Declaration of dividends by the board of directors 
D)  Retained earnings 
A)  Adequate cash 
B)  Approval of stockholders 
C)  Declaration of dividends by the board of directors 
D)  Retained earnings

Question 4

The Accumulated Other Comprehensive income account can have either a debit or credit balance.

Accepted Answer

A) True 
 B)False

Question 5

Assume that all balance sheet amounts for Marley Company represent average balance figures.   What is the return on common stockholders' equity for Marley?

Accepted Answer

A)  19.3% 
B)  16.7% 
C)  12.5% 
D)  10.0% 
A)  19.3% 
B)  16.7% 
C)  12.5% 
D)  10.0%

Question 6

The cash proceeds from issuing par value stock may be equal to or greater than, but not less than par value.

Accepted Answer

A) True 
 B)False

Question 7

Vega Corporation's December 31, 2018 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 15,000 shares   Vega's total paid-in capital was

Accepted Answer

A)  $21,480,000. 
B)  $21,795,000. 
C)  $21,165,000. 
D)  $11,530,000. 
A)  $21,480,000. 
B)  $21,795,000. 
C)  $21,165,000. 
D)  $11,530,000.

Question 8

The return on common stockholders' equity is computed by dividing

Accepted Answer

A)  net income by ending common stockholders' equity. 
B)  net income by average common stockholders' equity. 
C)  net income minus preferred dividends by ending common stockholders' equity. 
D)  net income minus preferred dividends by average common stockholders' equity. 
A)  net income by ending common stockholders' equity. 
B)  net income by average common stockholders' equity. 
C)  net income minus preferred dividends by ending common stockholders' equity. 
D)  net income minus preferred dividends by average common stockholders' equity.

Question 9

Which one of the following events would not require a formal journal entry on a corporation's books?

Accepted Answer

A)  2 for 1 stock split 
B)  100% stock dividend 
C)  2% stock dividend 
D)  $1 per share cash dividend 
A)  2 for 1 stock split 
B)  100% stock dividend 
C)  2% stock dividend 
D)  $1 per share cash dividend

Question 10

Information that is not generally reported for each class of stock on the balance sheet is

Accepted Answer

A)  the market value. 
B)  the par value. 
C)  shares authorized. 
D)  shares issued. 
A)  the market value. 
B)  the par value. 
C)  shares authorized. 
D)  shares issued.

Question 11

Dividends in arrears on cumulative preferred stock

Accepted Answer

A)  are shown in stockholders' equity of the balance sheet. 
B)  must be paid before common stockholders can receive a dividend. 
C)  should be recorded as a current liability until they are paid. 
D)  enable the preferred stockholders to share equally in corporate earnings with the common stockholders. 
A)  are shown in stockholders' equity of the balance sheet. 
B)  must be paid before common stockholders can receive a dividend. 
C)  should be recorded as a current liability until they are paid. 
D)  enable the preferred stockholders to share equally in corporate earnings with the common stockholders.

Question 12

The following selected amounts are available for Clark Company.   What is its ending retained earnings balance?

Accepted Answer

A)  $750 
B)  $800 
C)  $550 
D)  $700 
A)  $750 
B)  $800 
C)  $550 
D)  $700

Question 13

Which one of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)  Limited liability of owners 
B)  Separate legal existence 
C)  Continuous life 
D)  Government regulation 
A)  Limited liability of owners 
B)  Separate legal existence 
C)  Continuous life 
D)  Government regulation

Question 14

Desert Corporation has the following capital stock outstanding at December 31, 2018:   The preferred stock was issued at $130 per share. The common stock was issued at an average per share price of $14.
Instructions
Prepare the paid-in capital section of the balance sheet at December 31, 2018.

Accepted Answer

The answer of Desert Corporation has the following capital stock...

Question 15

Crain Company issued 2,000 shares of its $5 par value common stock in payment of its attorney's bill of $30,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

Accepted Answer

A)  Legal Expense for $10,000. 
B)  Legal Expense for $30,000. 
C)  Organization Expense for $10,000. 
D)  Organization Expense for $30,000. 
A)  Legal Expense for $10,000. 
B)  Legal Expense for $30,000. 
C)  Organization Expense for $10,000. 
D)  Organization Expense for $30,000.

Question 16

Aim, Inc., has 10,000 shares of 4%, $100 par value, noncumulative preferred stock and 40,000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2017. The board of directors declares and pays a $120,000 dividend in 2018. What is the amount of dividends received by the common stockholders in 2018?

Accepted Answer

A)  $0 
B)  $40,000 
C)  $60,000 
D)  $80,000 
A)  $0 
B)  $40,000 
C)  $60,000 
D)  $80,000

Question 17

The person responsible for maintaining the company's cash position is the

Accepted Answer

A)  controller. 
B)  treasurer. 
C)  vice-president. 
D)  president. 
A)  controller. 
B)  treasurer. 
C)  vice-president. 
D)  president.

Question 18

Each of the following is correct regarding treasury stock except that it has been

Accepted Answer

A)  issued. 
B)  fully paid for. 
C)  reacquired. 
D)  retired. 
A)  issued. 
B)  fully paid for. 
C)  reacquired. 
D)  retired.

Question 19

A net loss

Accepted Answer

A)  occurs if operating expenses exceed cost of goods sold. 
B)  is not closed to Retained Earnings if it would result in a debit balance. 
C)  is closed to Retained Earnings even if it would result in a debit balance. 
D)  is closed to the paid-in capital account of the stockholders' equity section of the balance sheet. 
A)  occurs if operating expenses exceed cost of goods sold. 
B)  is not closed to Retained Earnings if it would result in a debit balance. 
C)  is closed to Retained Earnings even if it would result in a debit balance. 
D)  is closed to the paid-in capital account of the stockholders' equity section of the balance sheet.

Question 20

Retained earnings is affected by each of the following except

Accepted Answer

A)  net income. 
B)  stock dividends. 
C)  some disposals of treasury stock. 
D)  All of these affect retained earnings. 
A)  net income. 
B)  stock dividends. 
C)  some disposals of treasury stock. 
D)  All of these affect retained earnings.

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Treasury stock should be reported in the financial statements of a corporation as a(n)

Which one of the following is not necessary in order for a corporation to pay a cash dividend?

The Accumulated Other Comprehensive income account can have either a debit or credit balance.

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity for Marley?

The cash proceeds from issuing par value stock may be equal to or greater than, but not less than par value.

Vega Corporation's December 31, 2018 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 15,000 shares Vega's total paid-in capital was

The return on common stockholders' equity is computed by dividing

Which one of the following events would not require a formal journal entry on a corporation's books?

Information that is not generally reported for each class of stock on the balance sheet is

Dividends in arrears on cumulative preferred stock

The following selected amounts are available for Clark Company. What is its ending retained earnings balance?

Which one of the following would not be considered an advantage of the corporate form of organization?

Desert Corporation has the following capital stock outstanding at December 31, 2018: The preferred stock was issued at $130 per share. The common stock was issued at an average per share price of $14. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2018.

Crain Company issued 2,000 shares of its $5 par value common stock in payment of its attorney's bill of $30,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

The person responsible for maintaining the company's cash position is the

Each of the following is correct regarding treasury stock except that it has been

A net loss

Retained earnings is affected by each of the following except

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

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Exam 11: Corporations: Organization, Stock Transactions

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Treasury stock should be reported in the financial statements of a corporation as a(n)

Which one of the following is not necessary in order for a corporation to pay a cash dividend?

The Accumulated Other Comprehensive income account can have either a debit or credit balance.

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity for Marley?

The cash proceeds from issuing par value stock may be equal to or greater than, but not less than par value.

Vega Corporation's December 31, 2018 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 15,000 shares Vega's total paid-in capital was

The return on common stockholders' equity is computed by dividing

Which one of the following events would not require a formal journal entry on a corporation's books?

Information that is not generally reported for each class of stock on the balance sheet is

Dividends in arrears on cumulative preferred stock

The following selected amounts are available for Clark Company. What is its ending retained earnings balance?

Which one of the following would not be considered an advantage of the corporate form of organization?

Desert Corporation has the following capital stock outstanding at December 31, 2018: The preferred stock was issued at $130 per share. The common stock was issued at an average per share price of $14. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2018.

Crain Company issued 2,000 shares of its $5 par value common stock in payment of its attorney's bill of $30,000. The bill was for services performed in helping the company incorporate. Crain should record this transaction by debiting

The person responsible for maintaining the company's cash position is the

Each of the following is correct regarding treasury stock except that it has been

A net loss

Retained earnings is affected by each of the following except

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters