Question 1

Corporations are subject to more government regulations than sole proprietorships and partnerships.

Accepted Answer

A) True 
 B)False

Question 2

Mack Corporation has been issued a charter by the state of New Hampshire.This charter gives Mack the authority to issue 20,000 shares of $20 par value preferred stock and 100,000 shares of $5 par value common stock.Journalize the entries listed below.
 June 1 Issued 4,000 shares of preferred stock at $\$ 25$ per share.
4 Issued 5,000 shares of common stock at $\$ 15$ per share.
13 Issued 6,000 shares of common stock at $\$ 20$ per share.
21 Issued 1,000 shares of preferred stock at $\$ 35$ per share.

Accepted Answer

The answer of Mack Corporation has been issued a charter...

Question 3

Exchanged common stock for a building and land when the stock was selling at a discount.
Debit ________ & ________ & ________ Credit ________

Accepted Answer

Debit 4 &

Question 4

The par value of stock represents the market value of the capital of the corporation.

Accepted Answer

A) True 
 B)False

Question 5

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 non-cumulative with no dividends distributed last year.

Accepted Answer

Dividend for Preferred Stock: $50 par ×

Question 6

Tory Company received the first installment of $2,000 on a common stock subscription.The entry to record the collection would include a:

Accepted Answer

A) debit to Subscriptions Receivable-Common Stock for $2,000. 
B) credit to Common Stock Subscribed for $2,000. 
C) credit to Common Stock for $2,000. 
D) credit to Subscriptions Receivable-Common Stock for $2,000. 
A) debit to Subscriptions Receivable-Common Stock for $2,000. 
B) credit to Common Stock Subscribed for $2,000. 
C) credit to Common Stock for $2,000. 
D) credit to Subscriptions Receivable-Common Stock for $2,000.

Question 7

Exchanged common stock for machinery when the stock was selling at a premium.
Debit ________ Credit ________ & ________

Accepted Answer

Debit 3,Cr

Question 8

The entry to record MidIowa.net selling 1,000 shares of $6.00 par value common stock at $8.00 would be to:

Accepted Answer

A) debit Cash $8,000;credit Common Stock $6,000;credit Paid-in Capital in Excess of Par Value-Common $2,000. 
B) debit Cash $8,000;credit Common Stock $8,000. 
C) debit Cash $6,000;debit Paid-in Capital in Excess of Par Value-Common $2,000;credit Common Stock $8,000. 
D) None of these answers is correct. 
A) debit Cash $8,000;credit Common Stock $6,000;credit Paid-in Capital in Excess of Par Value-Common $2,000. 
B) debit Cash $8,000;credit Common Stock $8,000. 
C) debit Cash $6,000;debit Paid-in Capital in Excess of Par Value-Common $2,000;credit Common Stock $8,000. 
D) None of these answers is correct.

Question 9

Carmen Corporation issued 200 shares of its $5 par value stock to an attorney.The shares are in full settlement for $10,000 of legal services to help set up the company.Prepare the journal entry for the stock issuance.

Accepted Answer

The answer of Carmen Corporation issued 200 shares of its...

Question 10

The Harvester Corporation issued 50 shares of $20 par value stock to its accountant.The shares are in full payment for her $900 fee for assistance in setting up the new company.The entry to record the issuance of the stock would include a:

Accepted Answer

A) credit to Common Stock for $900. 
B) debit to Common Stock for $900. 
C) credit to Common Stock for $1,000. 
D) debit to Common Stock for $1,000. 
A) credit to Common Stock for $900. 
B) debit to Common Stock for $900. 
C) credit to Common Stock for $1,000. 
D) debit to Common Stock for $1,000.

Question 11

The sale of common stock was recorded as a sale of preferred stock.This error would cause:

Accepted Answer

A) the period end stockholders' equity to be overstated. 
B) the period end stockholders' equity to be understated. 
C) no effect on total stockholders' equity. 
D) None of these is correct. 
A) the period end stockholders' equity to be overstated. 
B) the period end stockholders' equity to be understated. 
C) no effect on total stockholders' equity. 
D) None of these is correct.

Question 12

A note payable was recorded as additional paid-in capital.This error would cause:

Accepted Answer

A) the period's net income to be understated. 
B) the period's net income to be overstated. 
C) the period end liabilities to be understated. 
D) None of these is correct. 
A) the period's net income to be understated. 
B) the period's net income to be overstated. 
C) the period end liabilities to be understated. 
D) None of these is correct.

Question 13

The sale of common stock above par was recorded by crediting Common Stock for the total amount.This error would cause:

Accepted Answer

A) the period end stockholders' equity to be overstated. 
B) the period end stockholders' equity to be understated. 
C) no effect on total stockholders' equity. 
D) None of these is correct. 
A) the period end stockholders' equity to be overstated. 
B) the period end stockholders' equity to be understated. 
C) no effect on total stockholders' equity. 
D) None of these is correct.

Question 14

Which of the following is a characteristic of a corporation?

Accepted Answer

A) The stockholders have unlimited liability. 
B) Ease of transferring ownership interest. 
C) A corporation cannot own property in its name. 
D) Cash dividends to the stockholders are nontaxable. 
A) The stockholders have unlimited liability. 
B) Ease of transferring ownership interest. 
C) A corporation cannot own property in its name. 
D) Cash dividends to the stockholders are nontaxable.

Question 15

Shares of outstanding stock always equal the number of shares of authorized stock.

Accepted Answer

A) True 
 B)False

Question 16

The two major components of the Stockholders' Equity section of the balance sheet are:

Accepted Answer

A) Paid-in Capital and Retained Earnings. 
B) Stock and Retained Earnings. 
C) Stock and Paid-in Capital. 
D) Authorized Stock and Preferred Stock. 
A) Paid-in Capital and Retained Earnings. 
B) Stock and Retained Earnings. 
C) Stock and Paid-in Capital. 
D) Authorized Stock and Preferred Stock.

Question 17

Alpha-Omega Industries has 20,000 shares of $10 par common stock and 10,000 shares of $40 par,5% preferred stock outstanding.Total dividends available are $62,000.Compute the dividends to be distributed to preferred and common stockholders under the following condition.
The preferred stock is nonparticipating and non-cumulative with no dividends distributed last year.

Accepted Answer

Preferred Stock: $40

Question 18

Madison Corporation is authorized to issue 3,000 shares of common stock.Record the journal entry for each of the following independent situations.Assume Madison issues 1,000 shares at $15 on August 31.
a)Common stock has a $10 per share par value.
b)Common stock has no par value and no stated amount.
c)Common stock is no-par stock with a stated value of $8 per share.

Accepted Answer

The answer of Madison Corporation is authorized to issue 3,000...

Question 19

Alpha Corporation's has 1,500 shares of $40 par,7% cumulative preferred stock and 2,200 shares of $10 par common stock.Alpha paid $12,000 in cash dividends including one-year dividends in arrears to preferred stockholders.Common stockholders will receive:

Accepted Answer

A) $0. 
B) $7,800. 
C) $1,600. 
D) $3,600. 
A) $0. 
B) $7,800. 
C) $1,600. 
D) $3,600.

Question 20

Corporations can issue:

Accepted Answer

A) par value shares. 
B) no-par value shares. 
C) stated value shares. 
D) All of these answers are correct. 
A) par value shares. 
B) no-par value shares. 
C) stated value shares. 
D) All of these answers are correct.

Exam 18: Corporations: Organizations and Stock

Corporations are subject to more government regulations than sole proprietorships and partnerships.

Exchanged common stock for a building and land when the stock was selling at a discount. Debit ________ & ________ & ________ Credit ________

The par value of stock represents the market value of the capital of the corporation.

Tory Company received the first installment of $2,000 on a common stock subscription.The entry to record the collection would include a:

Exchanged common stock for machinery when the stock was selling at a premium. Debit ________ Credit ________ & ________

The entry to record MidIowa.net selling 1,000 shares of $6.00 par value common stock at $8.00 would be to:

Carmen Corporation issued 200 shares of its $5 par value stock to an attorney.The shares are in full settlement for $10,000 of legal services to help set up the company.Prepare the journal entry for the stock issuance.

The Harvester Corporation issued 50 shares of $20 par value stock to its accountant.The shares are in full payment for her $900 fee for assistance in setting up the new company.The entry to record the issuance of the stock would include a:

The sale of common stock was recorded as a sale of preferred stock.This error would cause:

A note payable was recorded as additional paid-in capital.This error would cause:

The sale of common stock above par was recorded by crediting Common Stock for the total amount.This error would cause:

Which of the following is a characteristic of a corporation?

Shares of outstanding stock always equal the number of shares of authorized stock.

The two major components of the Stockholders' Equity section of the balance sheet are:

Alpha Corporation's has 1,500 shares of $40 par,7% cumulative preferred stock and 2,200 shares of $10 par common stock.Alpha paid $12,000 in cash dividends including one-year dividends in arrears to preferred stockholders.Common stockholders will receive:

Corporations can issue:

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

Exchanged common stock for a building and land when the stock was selling at a discount. Debit & & Credit

Exchanged common stock for machinery when the stock was selling at a premium. Debit Credit &