Question 1

A disadvantage of the corporate form of organization is

Accepted Answer

A) professional management. 
B) tax treatment. 
C) ease of transfer of ownership. 
D) lack of mutual agency. 
A) professional management. 
B) tax treatment. 
C) ease of transfer of ownership. 
D) lack of mutual agency.

Question 2

Which of the following is not a significant date with respect to dividends?

Accepted Answer

A) The declaration date. 
B) The incorporation date. 
C) The record date. 
D) The payment date. 
A) The declaration date. 
B) The incorporation date. 
C) The record date. 
D) The payment date.

Question 3

Ferman Corporation had net income of $140,000 and paid dividends of $40,000 to common stockholders and $20,000 to preferred stockholders in 2017. Ferman Corporation's common stockholders' equity at the beginning and end of 2017 was $870,000 and $1,130,000, respectively. Ferman Corporation's return on common stockholders' equity was

Accepted Answer

A) 14%. 
B) 12%. 
C) 9%. 
D) 8%. 
A) 14%. 
B) 12%. 
C) 9%. 
D) 8%.

Question 4

A corporation purchases 20,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Accepted Answer

A) Increase by $700,000. 
B) Decrease by $400,000. 
C) Decrease by $700,000. 
D) Decrease by $300,000. 
A) Increase by $700,000. 
B) Decrease by $400,000. 
C) Decrease by $700,000. 
D) Decrease by $300,000.

Question 5

Which of the following would not be true of a privately held corporation?

Accepted Answer

A) It is sometimes called a closely held corporation. 
B) Its shares are regularly traded on the New York Stock Exchange. 
C) It does not offer its shares for sale to the general public. 
D) It is usually smaller than a publicly held company. 
A) It is sometimes called a closely held corporation. 
B) Its shares are regularly traded on the New York Stock Exchange. 
C) It does not offer its shares for sale to the general public. 
D) It is usually smaller than a publicly held company.

Question 6

Retained earnings represents the amount of cash available for dividends.

Accepted Answer

A) True 
 B)False

Question 7

The liability of a stockholder is usually limited to the stockholder's investment in the corporation.

Accepted Answer

A) True 
 B)False

Question 8

The par value of common stock must always be equal to its market value on the date the stock is issued.

Accepted Answer

A) True 
 B)False

Question 9

The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures. $$\begin{array} { l r } 
\text { Total assets } & \$ 300,000 \
\text { Stockholders' equity-common } & 150,000 \
\text { Total stockholders' equity } & 200,000 \
\text { Sales revenue } & 100,000 \
\text { Net income } & 25,000 \
\text { Number of shares of common stock } & 6,000 \
\text { Common dividends } & 5,000 \
\text { Preferred dividends } & 7,000
\end{array}$$ What is the payout ratio for Benedict?

Accepted Answer

A) 48% 
B) 20% 
C) 28% 
D) 5% 
A) 48% 
B) 20% 
C) 28% 
D) 5%

Question 10

The payout ratio is computed by dividing total cash dividends paid on common stock by retained earnings.

Accepted Answer

A) True 
 B)False

Question 11

Logan Corporation issues 70,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $4,200,000 and a credit or credits to

Accepted Answer

A) Preferred Stock for $4,200,000. 
B) Preferred Stock for $3,500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $700,000. 
C) Preferred Stock for $3,500,000 and Retained Earnings for $700,000. 
D) Paid-in Capital from Preferred Stock for $4,200,000. 
A) Preferred Stock for $4,200,000. 
B) Preferred Stock for $3,500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $700,000. 
C) Preferred Stock for $3,500,000 and Retained Earnings for $700,000. 
D) Paid-in Capital from Preferred Stock for $4,200,000.

Question 12

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

A) decrease total liabilities and stockholders' equity. 
B) increase total expenses and total liabilities. 
C) increase total assets and stockholders' equity. 
D) decrease total assets and stockholders' equity. 
A) decrease total liabilities and stockholders' equity. 
B) increase total expenses and total liabilities. 
C) increase total assets and stockholders' equity. 
D) decrease total assets and stockholders' equity.

Question 13

Regular dividends are declared out of

Accepted Answer

A) paid-in capital in excess of par value. 
B) treasury stock. 
C) common stock. 
D) retained earnings. 
A) paid-in capital in excess of par value. 
B) treasury stock. 
C) common stock. 
D) retained earnings.

Question 14

The following data is available for BOX Corporation at December 31, 2017: $\begin{array}{lr}
\text { Common stock, par $ \$ 10 $ (authorized 30,000 shares) }&\$270,000\
\text {Treasury stock (at cost $ \$ 15 $ per share) }&\$1,200\
\end{array}$
 Based on the data, how many shares of common stock are outstanding?

Accepted Answer

A) 30,000. 
B) 27,000. 
C) 29,920. 
D) 26,920. 
A) 30,000. 
B) 27,000. 
C) 29,920. 
D) 26,920.

Question 15

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Accepted Answer

A) True 
 B)False

A disadvantage of the corporate form of organization is

Which of the following is not a significant date with respect to dividends?

A corporation purchases 20,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Which of the following would not be true of a privately held corporation?

Retained earnings represents the amount of cash available for dividends.

The liability of a stockholder is usually limited to the stockholder's investment in the corporation.

The par value of common stock must always be equal to its market value on the date the stock is issued.

The payout ratio is computed by dividing total cash dividends paid on common stock by retained earnings.

Logan Corporation issues 70,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $4,200,000 and a credit or credits to

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Regular dividends are declared out of

The following data is available for BOX Corporation at December 31, 2017: Common stock, par \ 10 (authorized 30,000 shares) \2 70,000 Treasury stock (at cost \ 15 per share) \1 ,200 Based on the data, how many shares of common stock are outstanding?

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

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

Filters

Exam 10: Reporting and Analyzing Stockholders Equity

A disadvantage of the corporate form of organization is

Which of the following is not a significant date with respect to dividends?

A corporation purchases 20,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Which of the following would not be true of a privately held corporation?

Retained earnings represents the amount of cash available for dividends.

The liability of a stockholder is usually limited to the stockholder's investment in the corporation.

The par value of common stock must always be equal to its market value on the date the stock is issued.

The payout ratio is computed by dividing total cash dividends paid on common stock by retained earnings.

Logan Corporation issues 70,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $4,200,000 and a credit or credits to

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Regular dividends are declared out of

The following data is available for BOX Corporation at December 31, 2017: Common stock, par \ 10 (authorized 30,000 shares) \2 70,000 Treasury stock (at cost \ 15 per share) \1 ,200 Based on the data, how many shares of common stock are outstanding?

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

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

Filters