Question 1

Preferred stock is considered to be non-participating when:

Accepted Answer

A) preferred stockholders get their yearly dividend and the reminder goes to common stockholders. 
B) preferred stockholders have a right to the current year's dividend,but do not receive holdovers from past years when dividends were not paid. 
C) preferred stockholders have a right to a certain dividend every year. 
D) None of these answers is correct. 
A) preferred stockholders get their yearly dividend and the reminder goes to common stockholders. 
B) preferred stockholders have a right to the current year's dividend,but do not receive holdovers from past years when dividends were not paid. 
C) preferred stockholders have a right to a certain dividend every year. 
D) None of these answers is correct.

Question 2

Describe a stock subscription plan.

Accepted Answer

In a stock subscription plan,buyers pled

Question 3

A company would rarely sell its stock for below par value.

Accepted Answer

A) True 
 B)False

Question 4

Paid-in capital represents:

Accepted Answer

A) the cumulative earnings of the company. 
B) the investments of the owners into the company. 
C) the undistributed earnings of the company. 
D) None of the above 
A) the cumulative earnings of the company. 
B) the investments of the owners into the company. 
C) the undistributed earnings of the company. 
D) None of the above

Question 5

Dividends in arrears occur when the company does NOT pay dividends to:

Accepted Answer

A) cumulative preferred stockholders. 
B) non-cumulative preferred stockholders. 
C) participating preferred stockholders. 
D) non-participating common stockholders. 
A) cumulative preferred stockholders. 
B) non-cumulative preferred stockholders. 
C) participating preferred stockholders. 
D) non-participating common stockholders.

Question 6

Preferred stockholders have what right over common stockholders?

Accepted Answer

A) Voting rights 
B) Prior claim to dividends 
C) More risk than common stockholders 
D) Preemptive rights 
A) Voting rights 
B) Prior claim to dividends 
C) More risk than common stockholders 
D) Preemptive rights

Question 7

When a corporation has only one class of stock,it will be preferred stock.

Accepted Answer

A) True 
 B)False

Question 8

Soy.com Corporation has 100 shares of $100,7% cumulative nonparticipating preferred stock and 1,000 shares of $10 par value common stock outstanding.The company paid $4,000 cash dividends including one-year dividends in arrears to preferred stockholders.Preferred stockholders received:

Accepted Answer

A) $1,200. 
B) $2,000. 
C) $3,300. 
D) $1,400. 
A) $1,200. 
B) $2,000. 
C) $3,300. 
D) $1,400.

Question 9

Alpha-Omega Industries has 30,000 shares of $12 par common stock and 15,000 shares of $50 par,5% preferred stock outstanding.Total dividends available are $162,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is participating and cumulative with no dividends distributed last year.

Accepted Answer

Dividend for Preferred Stock: $50 par ×

Question 10

Dolly's Best issued 200 shares of its $10 common stock in exchange for used packaging equipment with a fair market value of $2,400.The entry to record the acquisition of the equipment would include a:

Accepted Answer

A) debit to Equipment for $2,000. 
B) credit to Paid-in Capital in Excess of Par Value-Common for $400. 
C) credit to Common Stock for $2,400. 
D) credit to Equipment for $2,400. 
A) debit to Equipment for $2,000. 
B) credit to Paid-in Capital in Excess of Par Value-Common for $400. 
C) credit to Common Stock for $2,400. 
D) credit to Equipment for $2,400.

Question 11

In the stockholders' equity section of a balance sheet:

Accepted Answer

A) common stock is listed before preferred stock. 
B) common stock is listed after preferred stock. 
C) common stock is listed after retained earnings. 
D) common stock is not listed. 
A) common stock is listed before preferred stock. 
B) common stock is listed after preferred stock. 
C) common stock is listed after retained earnings. 
D) common stock is not listed.

Question 12

When a stock subscription is received,Common Stock subscribed is debited for the total par value of the stock.

Accepted Answer

A) True 
 B)False

Question 13

The two main sources of stockholders' equity are investments by stockholders and net income retained in the corporation.

Accepted Answer

A) True 
 B)False

Question 14

Cox Corporation has issued 2,000 shares of stock.Janis owns 500 shares.If the corporation issues an additional 500 shares,how many shares does Janis have the preemptive right to purchase?

Accepted Answer

A) 100 shares 
B) 125 shares 
C) 250 shares 
D) 500 shares 
A) 100 shares 
B) 125 shares 
C) 250 shares 
D) 500 shares

Question 15

Journalize the transactions for the stock subscription plan for Nick Company.On February 1,Nick received subscriptions for 100 shares of $10 par value common stock at $12 per share.The buyer will pay two equal installments on March 1 and June 1.Assume all payments are made as scheduled and the company issues the stock after the June 1 collection.

Accepted Answer

The answer of Journalize the transactions for the stock subscription...

Question 16

Nonparticipating preferred stock allows stockholders an opportunity to share in additional dividends with common stockholders.

Accepted Answer

A) True 
 B)False

Question 17

Organization costs are:

Accepted Answer

A) part of the company's start-up and are listed as expenses. 
B) listed as an intangible asset on the balance sheet. 
C) a current asset on the balance sheet. 
D) a liability on the balance sheet. 
A) part of the company's start-up and are listed as expenses. 
B) listed as an intangible asset on the balance sheet. 
C) a current asset on the balance sheet. 
D) a liability on the balance sheet.

Question 18

Purchased land by exchanging common stock (valuation is above par).
Debit ________ Credit ________ & ________

Accepted Answer

Debit 5,Cr

Question 19

If stock shares are sold at more than their par value,the excess money is called:

Accepted Answer

A) earnings. 
B) paid-in capital in excess of par value. 
C) gain on issue of stock. 
D) discount on issue of stock. 
A) earnings. 
B) paid-in capital in excess of par value. 
C) gain on issue of stock. 
D) discount on issue of stock.

Question 20

If only one type of stock is issued,it is:

Accepted Answer

A) no-par preferred stock. 
B) preferred stock. 
C) legal capital. 
D) common stock. 
A) no-par preferred stock. 
B) preferred stock. 
C) legal capital. 
D) common stock.

Exam 18: Corporations: Organizations and Stock

Preferred stock is considered to be non-participating when:

Describe a stock subscription plan.

A company would rarely sell its stock for below par value.

Paid-in capital represents:

Dividends in arrears occur when the company does NOT pay dividends to:

Preferred stockholders have what right over common stockholders?

When a corporation has only one class of stock,it will be preferred stock.

Soy.com Corporation has 100 shares of $100,7% cumulative nonparticipating preferred stock and 1,000 shares of $10 par value common stock outstanding.The company paid $4,000 cash dividends including one-year dividends in arrears to preferred stockholders.Preferred stockholders received:

Dolly's Best issued 200 shares of its $10 common stock in exchange for used packaging equipment with a fair market value of $2,400.The entry to record the acquisition of the equipment would include a:

In the stockholders' equity section of a balance sheet:

When a stock subscription is received,Common Stock subscribed is debited for the total par value of the stock.

The two main sources of stockholders' equity are investments by stockholders and net income retained in the corporation.

Cox Corporation has issued 2,000 shares of stock.Janis owns 500 shares.If the corporation issues an additional 500 shares,how many shares does Janis have the preemptive right to purchase?

Nonparticipating preferred stock allows stockholders an opportunity to share in additional dividends with common stockholders.

Organization costs are:

Purchased land by exchanging common stock (valuation is above par). Debit ________ Credit ________ & ________

If stock shares are sold at more than their par value,the excess money is called:

If only one type of stock is issued,it is:

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: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Purchased land by exchanging common stock (valuation is above par). Debit Credit &