Question 1

The two ways that a corporation can be classified by ownership are

Accepted Answer

A) publicly held and privately held. 
B) stock and non-stock. 
C) inside and outside. 
D) majority and minority. 
A) publicly held and privately held. 
B) stock and non-stock. 
C) inside and outside. 
D) majority and minority.

Question 2

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 3

Sizemore, Inc. has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2017. If the board of directors declares a $25,000 dividend, the

Accepted Answer

A) preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B) preferred stockholders will receive the entire $25,000. 
C) $25,000 will be held as restricted retained earnings and paid out at some future date. 
D) preferred stockholders will receive $12,500 and the common stockholders will receive $12,500. 
A) preferred stockholders will receive 1/10th of what the common stockholders will receive. 
B) preferred stockholders will receive the entire $25,000. 
C) $25,000 will be held as restricted retained earnings and paid out at some future date. 
D) preferred stockholders will receive $12,500 and the common stockholders will receive $12,500.

Question 4

A small stock dividend is defined as

Accepted Answer

A) less than 30% but greater than 25% of the corporation's issued stock. 
B) between 50% and 100% of the corporation's issued stock. 
C) more than 30% of the corporation's issued stock. 
D) less than 20-25% of the corporation's issued stock. 
A) less than 30% but greater than 25% of the corporation's issued stock. 
B) between 50% and 100% of the corporation's issued stock. 
C) more than 30% of the corporation's issued stock. 
D) less than 20-25% of the corporation's issued stock.

Question 5

If Lantz Company issues 10,000 shares of $5 par value common stock for $210,000, the account

Accepted Answer

A) Common Stock will be credited for $50,000. 
B) Paid-in Capital in Excess of Par Value will be credited for $50,000. 
C) Paid-in Capital in Excess of Par Value will be credited for $210,000. 
D) Cash will be debited for $160,000. 
A) Common Stock will be credited for $50,000. 
B) Paid-in Capital in Excess of Par Value will be credited for $50,000. 
C) Paid-in Capital in Excess of Par Value will be credited for $210,000. 
D) Cash will be debited for $160,000.

Question 6

Nance Corporation's December 31, 2017 balance sheet showed the following: $\begin{array}{lr}6 \% \text { preferred stock, } \$ 20 \text { par value, cumulative, }\
30,000 \text { shares authorized; } 20,000 \text { shares issued }&\$400,000\
\text { Common stock, } \$ 10 \text { parvalue, } 3,000,000 \text { shares authorized; }\
1,950,000 \text { shares issued, } 1,920,000 \text { shares outstanding }&19,500,000\
\text { Paid-in capital in excess of parvalue - preferred stock } & 60,000 \
\text { Paid-in capital in excess of parvalue - common stock } & 28,000,000 \
\text { Retained earnings } & 9,650,000 \
\text { Treasury stock (30,000 shares) } & 630,000
\end{array}$ Nance's total stockholders' equity was

Accepted Answer

A) $58,240,000. 
B) $47,330,000. 
C) $57,610. 
D) $56,980,000. 
A) $58,240,000. 
B) $47,330,000. 
C) $57,610. 
D) $56,980,000.

Question 7

Racer Corporation's December 31, 2017 balance sheet showed the following:   Racer's total paid-in capital was

Accepted Answer

A) $63,580,000. 
B) $64,420,000. 
C) $62,740,000. 
D) $36,080,000. 
A) $63,580,000. 
B) $64,420,000. 
C) $62,740,000. 
D) $36,080,000.

Question 8

As soon as a corporation is authorized to sell stock, an accounting journal entry should be made recording the total value of the shares authorized.

Accepted Answer

A) True 
 B)False

Question 9

Brewer Inc. has 5,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2016. The board of directors declared and paid a $12,000 dividend in 2016. In 2017, $60,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2017?

Accepted Answer

A) $42,000. 
B) $30,000. 
C) $18,000. 
D) $15,000. 
A) $42,000. 
B) $30,000. 
C) $18,000. 
D) $15,000.

Question 10

Watson, Inc. has 10,000 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2017. There were no dividends declared in 2015. The board of directors declares and pays a $90,000 dividend in 2016 and in 2017. What is the amount of dividends received by the common stockholders in 2017?

Accepted Answer

A) $30,000. 
B) $40,000. 
C) $50,000. 
D) $0. 
A) $30,000. 
B) $40,000. 
C) $50,000. 
D) $0.

Question 11

Dividends are predominantly paid in

Accepted Answer

A) scrip. 
B) property. 
C) cash. 
D) stock. 
A) scrip. 
B) property. 
C) cash. 
D) stock.

Question 12

Which of the following phrases is not descriptive of the corporate form of business?

Accepted Answer

A) Professional management. 
B) Double taxation on distributed earnings. 
C) Unlimited liability. 
D) Continuous existence. 
A) Professional management. 
B) Double taxation on distributed earnings. 
C) Unlimited liability. 
D) Continuous existence.

Question 13

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Accepted Answer

A) The dividend can be rescinded once it has been declared. 
B) The corporation is committed to a legal, binding obligation. 
C) The board of directors formally authorizes the cash dividend. 
D) A liability account must be increased. 
A) The dividend can be rescinded once it has been declared. 
B) The corporation is committed to a legal, binding obligation. 
C) The board of directors formally authorizes the cash dividend. 
D) A liability account must be increased.

Question 14

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

Accepted Answer

The answer of Identify the effect the declaration of a...

Question 15

Which of the following represents the largest number of common shares?

Accepted Answer

A) Treasury shares. 
B) Issued shares. 
C) Outstanding shares. 
D) Authorized shares. 
A) Treasury shares. 
B) Issued shares. 
C) Outstanding shares. 
D) Authorized shares.

Question 16

Treasury stock is reported as an asset on the balance sheet because treasury stock may later be resold.

Accepted Answer

A) True 
 B)False

Question 17

What is the total stockholders' equity based on the following account balances? $\begin{array}{lr}
\text { Common Stock } & \$ 2,300,000 \
\text { Paid-In Capital in Excess of Par } & 120,000 \
\text { Retained Earnings } & 570,000 \
\text { Treasury Stock } & 60,000
\end{array}$

Accepted Answer

A) $2,690,000. 
B) $2,930,000. 
C) $3,050,000. 
D) $2,180,000. 
A) $2,690,000. 
B) $2,930,000. 
C) $3,050,000. 
D) $2,180,000.

Question 18

Holden Packaging Corporation began business in 2017 by issuing 90,000 shares of $5 par common stock for $8 per share and 20,000 shares of 6%, $10 par preferred stock for par. At year end, the common stock had a market value of $10. On its December 31, 2017 balance sheet, Holden Packaging would report

Accepted Answer

A) Common Stock of $900,000. 
B) Common Stock of $450,000. 
C) Common Stock of $720,000. 
D) Paid-In Capital of $675,000. 
A) Common Stock of $900,000. 
B) Common Stock of $450,000. 
C) Common Stock of $720,000. 
D) Paid-In Capital of $675,000.

Question 19

Nance Corporation's December 31, 2017 balance sheet showed the following: $\begin{array}{lr}6 \% \text { preferred stock, } \$ 20 \text { par value, cumulative, }\
30,000 \text { shares authorized; } 20,000 \text { shares issued }&\$400,000\
\text { Common stock, } \$ 10 \text { parvalue, } 3,000,000 \text { shares authorized; }\
1,950,000 \text { shares issued, } 1,920,000 \text { shares outstanding }&19,500,000\
\text { Paid-in capital in excess of parvalue - preferred stock } & 60,000 \
\text { Paid-in capital in excess of parvalue - common stock } & 28,000,000 \
\text { Retained earnings } & 9,650,000 \
\text { Treasury stock (30,000 shares) } & 630,000
\end{array}$ Nance's total paid-in capital was

Accepted Answer

A) $47,960,000. 
B) $48,590,000. 
C) $47,330,000. 
D) $28,060,000. 
A) $47,960,000. 
B) $48,590,000. 
C) $47,330,000. 
D) $28,060,000.

Question 20

For accounting purposes, stated value is treated the same way as par value.

Accepted Answer

A) True 
 B)False

The two ways that a corporation can be classified by ownership are

A net loss

Sizemore, Inc. has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2017. If the board of directors declares a $25,000 dividend, the

A small stock dividend is defined as

If Lantz Company issues 10,000 shares of $5 par value common stock for $210,000, the account

Racer Corporation's December 31, 2017 balance sheet showed the following: Racer's total paid-in capital was

As soon as a corporation is authorized to sell stock, an accounting journal entry should be made recording the total value of the shares authorized.

Dividends are predominantly paid in

Which of the following phrases is not descriptive of the corporate form of business?

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

Which of the following represents the largest number of common shares?

Treasury stock is reported as an asset on the balance sheet because treasury stock may later be resold.

What is the total stockholders' equity based on the following account balances? Common Stock \ 2,300,000 Paid-In Capital in Excess of Par 120,000 Retained Earnings 570,000 Treasury Stock 60,000

For accounting purposes, stated value is treated the same way as par value.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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Exam 10: Reporting and Analyzing Stockholders Equity

The two ways that a corporation can be classified by ownership are

A net loss

Sizemore, Inc. has 10,000 shares of 4%, $100 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2017. If the board of directors declares a $25,000 dividend, the

A small stock dividend is defined as

If Lantz Company issues 10,000 shares of $5 par value common stock for $210,000, the account

Racer Corporation's December 31, 2017 balance sheet showed the following: Racer's total paid-in capital was

As soon as a corporation is authorized to sell stock, an accounting journal entry should be made recording the total value of the shares authorized.

Dividends are predominantly paid in

Which of the following phrases is not descriptive of the corporate form of business?

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Identify the effect the declaration of a stock dividend has on the par value per share and book value per share.

Which of the following represents the largest number of common shares?

Treasury stock is reported as an asset on the balance sheet because treasury stock may later be resold.

What is the total stockholders' equity based on the following account balances? Common Stock \ 2,300,000 Paid-In Capital in Excess of Par 120,000 Retained Earnings 570,000 Treasury Stock 60,000

For accounting purposes, stated value is treated the same way as par value.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Activity-Based Costing

Cost-Volume-Profit

Cost-Volume-Profit Analysis: Additional Issues

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

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