Question 1

The journal entry for the receipt of a cash payment on common stock subscriptions would include

Accepted Answer

A)  debiting Cash and crediting Common Stock Subscriptions Receivable. 
B)  debiting Cash and crediting Common Stock. 
C)  debiting Common Stock and crediting Common Stock Subscriptions Receivable. 
D)  debiting Common Stock Subscriptions Receivable and crediting Common Stock. 
A)  debiting Cash and crediting Common Stock Subscriptions Receivable. 
B)  debiting Cash and crediting Common Stock. 
C)  debiting Common Stock and crediting Common Stock Subscriptions Receivable. 
D)  debiting Common Stock Subscriptions Receivable and crediting Common Stock.

Question 2

The certificate of incorporation is frequently referred to as the bylaws.

Accepted Answer

A) True 
 B)False

Question 3

Sanchez and Santos had the following transactions during the past year involving the purchase and sale of treasury stock.
July 14
Purchased 4,000 shares of its own $12 par common stock for $15 per sharE.17
Sold 2,000 shares of the treasury stock for $17 per sharE.29
Sold 2,000 shares of the treasury stock for $13 per sharE.Required:
Prepare the journal entries for the transactions.

Accepted Answer

The answer of Sanchez and Santos had the following transactions...

Question 4

A corporation purchases 4,000 shares of its $10 par common stock for $16 per share. The debit part of the journal entry for this transaction would be to

Accepted Answer

A)  Cash, $64,000. 
B)  Common Stock, $40,000. 
C)  Common Treasury Stock, $40,000. 
D)  Common Treasury Stock, $64,000. 
A)  Cash, $64,000. 
B)  Common Stock, $40,000. 
C)  Common Treasury Stock, $40,000. 
D)  Common Treasury Stock, $64,000.

Question 5

Stocks that carry certain specified preferences, or first claims, are called common stock.

Accepted Answer

A) True 
 B)False

Question 6

The major classes of stock are

Accepted Answer

A)  common and preferred stock. 
B)  common and treasury stock. 
C)  preferred and treasury stock. 
D)  common and authorized stock. 
A)  common and preferred stock. 
B)  common and treasury stock. 
C)  preferred and treasury stock. 
D)  common and authorized stock.

Question 7

There are more businesses organized as corporations than as sole proprietorships and partnerships in the United States.

Accepted Answer

A) True 
 B)False

Question 8

A major disadvantage of a corporation is that it must pay income taxes.

Accepted Answer

A) True 
 B)False

Question 9

The stockholders' equity section of the corporate balance sheet is separated into paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 10

The price at which a share of capital stock may be purchased or sold on the open market is described as its par value.

Accepted Answer

A) True 
 B)False

Question 11

Match the terms with the definitions.
-The process of taxing corporate income both to the company that earns it and to the owners who receive it.

Accepted Answer

A) authorized stock 
B) board of directors 
C) bylaws 
D) premium 
E) capital stock subscription
F)preferred stock
G)paid-in capital
H)cumulative preferred stock
I)dividends
J)double taxation
K)outstanding stock
L)no-par stock 
A) authorized stock 
B) board of directors 
C) bylaws 
D) premium 
E) capital stock subscription
F)preferred stock
G)paid-in capital
H)cumulative preferred stock
I)dividends
J)double taxation
K)outstanding stock
L)no-par stock

Question 12

Match the terms with the definitions.
-The amount paid by stockholders for their shares of stock.

Accepted Answer

A) authorized stock 
B) board of directors 
C) bylaws 
D) premium 
E) capital stock subscription
F)preferred stock
G)paid-in capital
H)cumulative preferred stock
I)dividends
J)double taxation
K)outstanding stock
L)no-par stock 
A) authorized stock 
B) board of directors 
C) bylaws 
D) premium 
E) capital stock subscription
F)preferred stock
G)paid-in capital
H)cumulative preferred stock
I)dividends
J)double taxation
K)outstanding stock
L)no-par stock

Question 13

Match the terms with the definitions.
-Stock that gives its owner the right to vote at stockholders' meeting, share in earnings distributions, purchase additional shares if more shares are issued by the corporation, and share in the assets if the corporation liquidates.

Accepted Answer

A) preemptive right 
B) participating preferred stock 
C) par value 
D) capital stock 
E) organization costs
F)charter
G)common stock
H)nonparticipating preferred stock
I)noncumulative preferred stock
J)no-par stock
K)incorporators
L)issued stock
M)market value
N)mutual agency 
A) preemptive right 
B) participating preferred stock 
C) par value 
D) capital stock 
E) organization costs
F)charter
G)common stock
H)nonparticipating preferred stock
I)noncumulative preferred stock
J)no-par stock
K)incorporators
L)issued stock
M)market value
N)mutual agency

Question 14

Match the terms with the definitions.
-The dollar amount printed on the share of stock.

Accepted Answer

A) preemptive right 
B) participating preferred stock 
C) par value 
D) capital stock 
E) organization costs
F)charter
G)common stock
H)nonparticipating preferred stock
I)noncumulative preferred stock
J)no-par stock
K)incorporators
L)issued stock
M)market value
N)mutual agency 
A) preemptive right 
B) participating preferred stock 
C) par value 
D) capital stock 
E) organization costs
F)charter
G)common stock
H)nonparticipating preferred stock
I)noncumulative preferred stock
J)no-par stock
K)incorporators
L)issued stock
M)market value
N)mutual agency

Question 15

When a corporation sells its capital stock, certificates are issued to the stockholders and the stock is said to be issued and outstanding.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following are considered to be legal entities that exist separate and distinct from their owners?

Accepted Answer

A)  sole proprietorships 
B)  partnerships 
C)  corporations 
D)  organizations with more than 100 partners 
A)  sole proprietorships 
B)  partnerships 
C)  corporations 
D)  organizations with more than 100 partners

Question 17

Based on the following information, prepare journal entries for Windgate Corporation.
Mar. 7
Issued 10,000 shares of $5 par common stock for $43,000 casH.16
Issued 6,000 shares of $5 par common stock for $33,000 casH.23
Issued 4,000 shares of $12 par, 7% preferred stock for $53,000 casH.29
Issued 5,000 shares of $4 par common stock for land with a fair market value of $28,000.
​

Accepted Answer

The answer of Based on the following information, prepare journal...

Question 18

If there is only one class of stock outstanding, such stock would be classified as

Accepted Answer

A)  treasury stock. 
B)  common stock. 
C)  preferred stock. 
D)  outstanding stock. 
A)  treasury stock. 
B)  common stock. 
C)  preferred stock. 
D)  outstanding stock.

Question 19

Match the terms with the definitions.
-Represents ownership rights in a corporation. Generally broken down into common and preferred stock.

Accepted Answer

A) preemptive right 
B) participating preferred stock 
C) par value 
D) capital stock 
E) organization costs
F)charter
G)common stock
H)nonparticipating preferred stock
I)noncumulative preferred stock
J)no-par stock
K)incorporators
L)issued stock
M)market value
N)mutual agency 
A) preemptive right 
B) participating preferred stock 
C) par value 
D) capital stock 
E) organization costs
F)charter
G)common stock
H)nonparticipating preferred stock
I)noncumulative preferred stock
J)no-par stock
K)incorporators
L)issued stock
M)market value
N)mutual agency

Question 20

A journal entry for the sale of $10-par common stock for $18 per share would include

Accepted Answer

A)  a debit to Cash. 
B)  a debit to Common Stock. 
C)  a debit to Treasury Stock. 
D)  a debit to Paid-In Capital in Excess of Par - Common Stock. 
A)  a debit to Cash. 
B)  a debit to Common Stock. 
C)  a debit to Treasury Stock. 
D)  a debit to Paid-In Capital in Excess of Par - Common Stock.

Exam 20: Corporations: Organization and Capital Stocks

The journal entry for the receipt of a cash payment on common stock subscriptions would include

The certificate of incorporation is frequently referred to as the bylaws.

A corporation purchases 4,000 shares of its $10 par common stock for $16 per share. The debit part of the journal entry for this transaction would be to

Stocks that carry certain specified preferences, or first claims, are called common stock.

The major classes of stock are

There are more businesses organized as corporations than as sole proprietorships and partnerships in the United States.

A major disadvantage of a corporation is that it must pay income taxes.

The stockholders' equity section of the corporate balance sheet is separated into paid-in capital and retained earnings.

The price at which a share of capital stock may be purchased or sold on the open market is described as its par value.

Match the terms with the definitions. -The process of taxing corporate income both to the company that earns it and to the owners who receive it.

Match the terms with the definitions. -The amount paid by stockholders for their shares of stock.

Match the terms with the definitions. -Stock that gives its owner the right to vote at stockholders' meeting, share in earnings distributions, purchase additional shares if more shares are issued by the corporation, and share in the assets if the corporation liquidates.

Match the terms with the definitions. -The dollar amount printed on the share of stock.

When a corporation sells its capital stock, certificates are issued to the stockholders and the stock is said to be issued and outstanding.

Which of the following are considered to be legal entities that exist separate and distinct from their owners?

If there is only one class of stock outstanding, such stock would be classified as

Match the terms with the definitions. -Represents ownership rights in a corporation. Generally broken down into common and preferred stock.

A journal entry for the sale of $10-par common stock for $18 per share would include

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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