Question 1

Which of the following is true about retained earnings?

Accepted Answer

A) Declaring a stock split will decrease retained earnings. 
B) Appropriating retained earnings will increase total stockholders' equity. 
C) Distributing stock dividends will decrease retained earnings. 
D) Declaring cash dividends will decrease retained earnings. 
A) Declaring a stock split will decrease retained earnings. 
B) Appropriating retained earnings will increase total stockholders' equity. 
C) Distributing stock dividends will decrease retained earnings. 
D) Declaring cash dividends will decrease retained earnings.

Question 2

Prepare a statement of retained earnings in proper form for White Corporation for the year ended December 31,20XX,from the following:
 $\begin{array}{lr}
\text { Retained Earnings, January 1, 20xx } & \$ 5,000 \
\text { Dividends declared during the year } & 1,800 \
\text { Net income for the year } & 4,000 \
\text { Correction of prior year error. purchase } & \
\text { of land recorded as rent expense } & 500
\end{array}$

Accepted Answer

The answer of Prepare a statement of retained earnings in...

Question 3

Ariel Investigations has total paid-in capital of $70,000 and retained earnings of $40,000.It has 100 shares of $100 par value common stock outstanding,and no preferred shares outstanding..The book value of each share of common stock is:

Accepted Answer

A) $400 
B) $700. 
C) $1,100. 
D) $1,000 
A) $400 
B) $700. 
C) $1,100. 
D) $1,000

Question 4

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

Accepted Answer

A) Debit Cash $2,000;credit Treasury Stock-Common $1,500,credit Paid-In Capital from Treasury Stock $500 
B) Debit Cash $2,000;credit Treasury Stock-Common $2,000 
C) Debit Cash $1,500;debit Paid-In Capital from Treasury Stock $500,credit Treasury Stock-Common $2,000 
D) None of these answers is correct. 
A) Debit Cash $2,000;credit Treasury Stock-Common $1,500,credit Paid-In Capital from Treasury Stock $500 
B) Debit Cash $2,000;credit Treasury Stock-Common $2,000 
C) Debit Cash $1,500;debit Paid-In Capital from Treasury Stock $500,credit Treasury Stock-Common $2,000 
D) None of these answers is correct.

Question 5

When treasury stock is sold,the Paid-in Capital in Excess of Par Value is decreased.

Accepted Answer

A) True 
 B)False

Question 6

Before a three-for-one stock split,the shares outstanding were 4,000 shares at $9 par.After the split,what was the par value per share and number of shares?

Accepted Answer

A) 12,000 shares at $9 per share 
B) 12,000 shares at $3 per share 
C) 12,000 shares at $6 per share 
D) 4,000 shares at $27 per share 
A) 12,000 shares at $9 per share 
B) 12,000 shares at $3 per share 
C) 12,000 shares at $6 per share 
D) 4,000 shares at $27 per share

Question 7

Which of the following statements is false about treasury stock?

Accepted Answer

A) It carries no right to dividends. 
B) It carries no right to vote. 
C) It is stock that is outstanding. 
D) All of the statements are false. 
A) It carries no right to dividends. 
B) It carries no right to vote. 
C) It is stock that is outstanding. 
D) All of the statements are false.

Question 8

Most companies report restrictions of Retained Earnings by using a footnote to the Retained Earnings account.

Accepted Answer

A) True 
 B)False

Question 9

The entry to record the distribution of the stock dividend would include:

Accepted Answer

A) a debit to Common Stock. 
B) a debit to Common Stock Dividend Distributable. 
C) a debit to Retained Earnings. 
D) None of these answers is correct. 
A) a debit to Common Stock. 
B) a debit to Common Stock Dividend Distributable. 
C) a debit to Retained Earnings. 
D) None of these answers is correct.

Question 10

The payment of a cash dividend was recorded as payment to Miscellaneous Expense.This error would cause:

Accepted Answer

A) the period end net income to be understated. 
B) the period end liabilities to be overstated. 
C) the period end stockholders' equity to be overstated. 
D) Both A and B 
A) the period end net income to be understated. 
B) the period end liabilities to be overstated. 
C) the period end stockholders' equity to be overstated. 
D) Both A and B

Question 11

What are the annual dividends on preferred stock,$15 par,500 authorized,300 shares issued,and a dividend rate of 12%?

Accepted Answer

A) $540 
B) $600 
C) $300 
D) $150 
A) $540 
B) $600 
C) $300 
D) $150

Question 12

Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings.This error would cause:

Accepted Answer

A) the period's net income to be understated. 
B) the period end liabilities to be understated. 
C) the total period end stockholders' equity to be understated. 
D) the period's net income to be overstated. 
A) the period's net income to be understated. 
B) the period end liabilities to be understated. 
C) the total period end stockholders' equity to be understated. 
D) the period's net income to be overstated.

Question 13

Retained earnings represent past investments into the company.

Accepted Answer

A) True 
 B)False

Question 14

When treasury stock is reissued for more than cost,the journal entry would include a:

Accepted Answer

A) credit to Cash 
B) credit to Common Stock. 
C) debit to Treasury Stock. 
D) credit to Paid-in Capital from Treasury Stock. 
A) credit to Cash 
B) credit to Common Stock. 
C) debit to Treasury Stock. 
D) credit to Paid-in Capital from Treasury Stock.

Question 15

Malcolm Corporation declared a dividend of $3 per share on 1,200 shares.The entry to record the transaction would be to:

Accepted Answer

A) debit Dividends Expense $3.600;credit Cash $3.600. 
B) debit Retained Earnings $3,600;credit Cash $3,600. 
C) debit Dividends Payable $3,600;credit Cash $3,600. 
D) debit Retained Earnings $3,600;credit Dividends Payable $3,600. 
A) debit Dividends Expense $3.600;credit Cash $3.600. 
B) debit Retained Earnings $3,600;credit Cash $3,600. 
C) debit Dividends Payable $3,600;credit Cash $3,600. 
D) debit Retained Earnings $3,600;credit Dividends Payable $3,600.

Question 16

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Accepted Answer

A) credit to Paid-in Capital from Treasury Stock for $600. 
B) debit to Treasury Stock for $800. 
C) credit to Paid-in Capital from Treasury Stock for $200. 
D) debit to Common Stock for $400. 
A) credit to Paid-in Capital from Treasury Stock for $600. 
B) debit to Treasury Stock for $800. 
C) credit to Paid-in Capital from Treasury Stock for $200. 
D) debit to Common Stock for $400.

Question 17

Changes in retained earnings can result from:

Accepted Answer

A) purchasing equipment. 
B) net income or net loss. 
C) paying down debt. 
D) All of these answers are correct. 
A) purchasing equipment. 
B) net income or net loss. 
C) paying down debt. 
D) All of these answers are correct.

Question 18

A prior period adjustment is corrected to the ending balance of Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 19

A corporation purchased 35 shares of treasury stock for $40.The entry to record the transaction would include a:

Accepted Answer

A) debit to Cash for $1400. 
B) credit to Treasury Stock for $1400. 
C) debit to Treasury Stock for $1400. 
D) None of these answers is correct. 
A) debit to Cash for $1400. 
B) credit to Treasury Stock for $1400. 
C) debit to Treasury Stock for $1400. 
D) None of these answers is correct.

Question 20

When a 10% stock dividend was declared,only the par value was recorded and the excess over par value was ignored.This error would cause:

Accepted Answer

A) the period end assets to be overstated. 
B) the period end liabilities to be overstated. 
C) the period end stockholders' equity to be overstated. 
D) None of these is correct. 
A) the period end assets to be overstated. 
B) the period end liabilities to be overstated. 
C) the period end stockholders' equity to be overstated. 
D) None of these is correct.

Exam 19: Corporations: Stock Values,dividends,treasury Stocks,

Which of the following is true about retained earnings?

Ariel Investigations has total paid-in capital of $70,000 and retained earnings of $40,000.It has 100 shares of $100 par value common stock outstanding,and no preferred shares outstanding..The book value of each share of common stock is:

Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share.What is the entry?

When treasury stock is sold,the Paid-in Capital in Excess of Par Value is decreased.

Before a three-for-one stock split,the shares outstanding were 4,000 shares at $9 par.After the split,what was the par value per share and number of shares?

Which of the following statements is false about treasury stock?

Most companies report restrictions of Retained Earnings by using a footnote to the Retained Earnings account.

The entry to record the distribution of the stock dividend would include:

The payment of a cash dividend was recorded as payment to Miscellaneous Expense.This error would cause:

What are the annual dividends on preferred stock,$15 par,500 authorized,300 shares issued,and a dividend rate of 12%?

Providing services to a credit customer was recorded with a debit to Cash and a credit to Retained Earnings.This error would cause:

Retained earnings represent past investments into the company.

When treasury stock is reissued for more than cost,the journal entry would include a:

Malcolm Corporation declared a dividend of $3 per share on 1,200 shares.The entry to record the transaction would be to:

A corporation sold 20 shares of $20 par value treasury stock for $40 per share.The treasury stock cost $30 per share to acquire.The entry to record the transaction would include a:

Changes in retained earnings can result from:

A prior period adjustment is corrected to the ending balance of Retained Earnings.

A corporation purchased 35 shares of treasury stock for $40.The entry to record the transaction would include a:

When a 10% stock dividend was declared,only the par value was recorded and the excess over par value was ignored.This error would cause:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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