Question 1

When treasury stock is reissued and the cost is less than the reissue price, the difference increases additional paid- in capital.

Accepted Answer

A) True 
 B)False

Question 2

Manson World reported the following:
Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding
What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Accepted Answer

A) Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts. 
B) Cash decreases $400,000. 
C) Additional Paid-in Capital increases $400,000. 
D) A stock split has no effect on total stockholders' equity. 
A) Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts. 
B) Cash decreases $400,000. 
C) Additional Paid-in Capital increases $400,000. 
D) A stock split has no effect on total stockholders' equity.

Question 3

Which of the following is true?

Accepted Answer

A) The sale of stock to stockholders is an investing activity. 
B) The repurchase of stock from stockholders is an investing activity. 
C) The declaration of stock dividends is a financing activity. 
D) The payment of cash dividends is a financing activity. 
A) The sale of stock to stockholders is an investing activity. 
B) The repurchase of stock from stockholders is an investing activity. 
C) The declaration of stock dividends is a financing activity. 
D) The payment of cash dividends is a financing activity.

Question 4

Which of the following is reported as a financing activity?

Accepted Answer

A) Payment of cash dividends 
B) Declaration of cash dividends 
C) Stock dividend 
D) Stock split 
A) Payment of cash dividends 
B) Declaration of cash dividends 
C) Stock dividend 
D) Stock split

Question 5

[APPENDIX] Which of the following statements regarding partnerships is true?

Accepted Answer

A) Partnerships have two owners. 
B) The partnership ends when a new partner is added. 
C) The partnership is responsible for its own taxes. 
D) The partnership is a separate legal entity from its owners. 
A) Partnerships have two owners. 
B) The partnership ends when a new partner is added. 
C) The partnership is responsible for its own taxes. 
D) The partnership is a separate legal entity from its owners.

Question 6

[APPPENDIX] When an individual wishes to form a sole proprietorship, he or she does so by

Accepted Answer

A) filing a petition with the IRS. 
B) purchasing stock in the proprietorship. 
C) filing corporate paperwork with the state. 
D) contributing cash or other assets. 
A) filing a petition with the IRS. 
B) purchasing stock in the proprietorship. 
C) filing corporate paperwork with the state. 
D) contributing cash or other assets.

Question 7

[APPENDIX] When the owner of a sole proprietorship withdraws assets from the business for personal use

Accepted Answer

A) it is treated like a noncash dividend. 
B) it is illegal because the assets belong to the separate entity, the proprietorship. 
C) it would be recorded as a loss by the proprietorship. 
D) it is recorded as a reduction of owner's equity. 
A) it is treated like a noncash dividend. 
B) it is illegal because the assets belong to the separate entity, the proprietorship. 
C) it would be recorded as a loss by the proprietorship. 
D) it is recorded as a reduction of owner's equity.

Question 8

When a company declares a stock dividend, which of the following occurs?

Accepted Answer

A) A liability is created. 
B) Retained earnings is reduced. 
C) Stockholders' equity is decreased. 
D) The financing section of the statement of cash flows is decreased. 
A) A liability is created. 
B) Retained earnings is reduced. 
C) Stockholders' equity is decreased. 
D) The financing section of the statement of cash flows is decreased.

Question 9

If a company purchases treasury stock for $6,000 and then reissues it for $5,000, the difference of $1,000 is

Accepted Answer

A) treated as a gain on the sale. 
B) treated as a loss on the sale. 
C) an increase in stockholders' equity. 
D) a decrease in stockholders' equity. 
A) treated as a gain on the sale. 
B) treated as a loss on the sale. 
C) an increase in stockholders' equity. 
D) a decrease in stockholders' equity.

Question 10

Cash dividends become a liability to a corporation on the date of record.

Accepted Answer

A) True 
 B)False

Question 11

[APPENDIX] Which of the following is true concerning a sole proprietorship?

Accepted Answer

A) It is a separate legal entity. 
B) It may have more than one class of stock outstanding. 
C) It is owned by one or more persons. 
D) The separate entity concept applies. 
A) It is a separate legal entity. 
B) It may have more than one class of stock outstanding. 
C) It is owned by one or more persons. 
D) The separate entity concept applies.

Question 12

Select the best answer from the list below to complete statements that follow.  
-The selling price of the stock as indicated by the most recent stock transaction is
___________________________________.

Accepted Answer

market val

Question 13

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new, there is no established market price for its stock.How would the company record the transaction?

Accepted Answer

A) In terms of the par value of the stock issued. 
B) At the fair market value of the machine. 
C) At the cost recorded by the previous owner of the machine. 
D) Recording the transaction would be postponed until a market price for the stock could be determined. 
A) In terms of the par value of the stock issued. 
B) At the fair market value of the machine. 
C) At the cost recorded by the previous owner of the machine. 
D) Recording the transaction would be postponed until a market price for the stock could be determined.

Question 14

The cumulative feature of stock allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

Accepted Answer

A) The issuance of stock decreases several important financial ratios. 
B) Issuing bonds dilutes the voting power of the stockholders. 
C) Corporations are not required to return the investment to the stockholders. 
D) Investors expect to earn a higher rate of return on stocks than bonds. 
A) The issuance of stock decreases several important financial ratios. 
B) Issuing bonds dilutes the voting power of the stockholders. 
C) Corporations are not required to return the investment to the stockholders. 
D) Investors expect to earn a higher rate of return on stocks than bonds.

Question 16

When the board of director's declares a cash or stock dividend, this action decreases Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 17

Select the best answer from the list below to complete statements that follow.  
-The number of shares issued less the number of shares held as treasury stock are
______________________________.

Accepted Answer

The answer of Select the best answer from the list...

Question 18

All of the following are reasons for a company to repurchase its previously issued stock, except:

Accepted Answer

A) to support the market price of the stock 
B) to resell to employees 
C) to increase the shares outstanding 
D) for bonuses to employees 
A) to support the market price of the stock 
B) to resell to employees 
C) to increase the shares outstanding 
D) for bonuses to employees

Question 19

The statement of stockholders' equity for Jutras Corporation shows an increase in the Common Stock account of $8,000, an increase in Additional Paid-in Capital--Common in the amount of $22,000, and an increase in Retained Earnings of $50,000.If the stock has a par value of $3 and dividends of $10,000 were declared and paid during the year, what is the amount of net income for the year?

Accepted Answer

A) $40,000 
B) $50,000 
C) $60,000 
D) $90,000 
A) $40,000 
B) $50,000 
C) $60,000 
D) $90,000

Question 20

Book value is a measure of the market value of the stock.

Accepted Answer

A) True 
 B)False

When treasury stock is reissued and the cost is less than the reissue price, the difference increases additional paid- in capital.

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Which of the following is true?

Which of the following is reported as a financing activity?

[APPENDIX] Which of the following statements regarding partnerships is true?

[APPPENDIX] When an individual wishes to form a sole proprietorship, he or she does so by

[APPENDIX] When the owner of a sole proprietorship withdraws assets from the business for personal use

When a company declares a stock dividend, which of the following occurs?

If a company purchases treasury stock for $6,000 and then reissues it for $5,000, the difference of $1,000 is

Cash dividends become a liability to a corporation on the date of record.

[APPENDIX] Which of the following is true concerning a sole proprietorship?

Select the best answer from the list below to complete statements that follow. -The selling price of the stock as indicated by the most recent stock transaction is ___________________________________.

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new, there is no established market price for its stock.How would the company record the transaction?

The cumulative feature of stock allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

When the board of director's declares a cash or stock dividend, this action decreases Retained Earnings.

Select the best answer from the list below to complete statements that follow. -The number of shares issued less the number of shares held as treasury stock are ______________________________.

All of the following are reasons for a company to repurchase its previously issued stock, except:

Book value is a measure of the market value of the stock.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 11: Stockholders Equity

When treasury stock is reissued and the cost is less than the reissue price, the difference increases additional paid- in capital.

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Which of the following is true?

Which of the following is reported as a financing activity?

[APPENDIX] Which of the following statements regarding partnerships is true?

[APPPENDIX] When an individual wishes to form a sole proprietorship, he or she does so by

[APPENDIX] When the owner of a sole proprietorship withdraws assets from the business for personal use

When a company declares a stock dividend, which of the following occurs?

If a company purchases treasury stock for $6,000 and then reissues it for $5,000, the difference of $1,000 is

Cash dividends become a liability to a corporation on the date of record.

[APPENDIX] Which of the following is true concerning a sole proprietorship?

Select the best answer from the list below to complete statements that follow. -The selling price of the stock as indicated by the most recent stock transaction is ___________________________________.

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new, there is no established market price for its stock.How would the company record the transaction?

The cumulative feature of stock allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

Which of the following is false regarding the issue of stock versus the issue of bonds to raise capital?

When the board of director's declares a cash or stock dividend, this action decreases Retained Earnings.

Select the best answer from the list below to complete statements that follow. -The number of shares issued less the number of shares held as treasury stock are ______________________________.

All of the following are reasons for a company to repurchase its previously issued stock, except:

Book value is a measure of the market value of the stock.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Current Liabilities, Contingencies, and the Time Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters