Question 1

If a company has both common and preferred shares outstanding and wishes to calculate book value per share,

Accepted Answer

A) net assets must be divided by the total number of both classes of stock. 
B) net assets, less the redemption value of the preferred stock, must be divided by the number of shares of common stock outstanding. 
C) stockholders' equity must be divided by the total number of both classes of stock. 
D) stockholders' equity, less the cost of treasury shares held, must be divided by the number of common shares outstanding. 
A) net assets must be divided by the total number of both classes of stock. 
B) net assets, less the redemption value of the preferred stock, must be divided by the number of shares of common stock outstanding. 
C) stockholders' equity must be divided by the total number of both classes of stock. 
D) stockholders' equity, less the cost of treasury shares held, must be divided by the number of common shares outstanding.

Question 2

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

Accepted Answer

A) The payment of dividends is at the discretion of the board of directors. 
B) The payment of interest on bonds payable is required by law. 
C) Interest accrues, whereas dividends do not accrue. 
D) The declaration of dividends reduces the amount of income taxes the corporation must pay. 
A) The payment of dividends is at the discretion of the board of directors. 
B) The payment of interest on bonds payable is required by law. 
C) Interest accrues, whereas dividends do not accrue. 
D) The declaration of dividends reduces the amount of income taxes the corporation must pay.

Question 3

A company issued 4,000 shares of $5 par common stock for $30 per share.The company purchased 1,200 shares as treasury stock at $32 per share.Later, the company reissued 400 shares of the treasury stock at $34 per share.Which of the following is true?

Accepted Answer

A) The Treasury Stock account should have a balance of $24,800. 
B) The company has a gain of $800 that should appear on the income statement. 
C) The Treasury Stock account should have a balance of $25,600. 
D) The company has a gain of $1,600 that should appear on the income statement. 
A) The Treasury Stock account should have a balance of $24,800. 
B) The company has a gain of $800 that should appear on the income statement. 
C) The Treasury Stock account should have a balance of $25,600. 
D) The company has a gain of $1,600 that should appear on the income statement.

Question 4

Which of the following transactions has an effect on the statement of cash flows?

Accepted Answer

A) The sale of preferred stock 
B) The declaration of a cash dividend 
C) A small stock dividend 
D) A large stock dividend 
A) The sale of preferred stock 
B) The declaration of a cash dividend 
C) A small stock dividend 
D) A large stock dividend

Question 5

FASB's concept of comprehensive income

Accepted Answer

A) excludes transactions that involve the payment of dividends. 
B) requires that all transactions must be shown on the income statement. 
C) has a primary drawback because it allows management to manipulate the income figure to a certain extent. 
D) allows items that are not necessarily under management's control, such as natural disasters, to be shown as an adjustment of retained earnings. 
A) excludes transactions that involve the payment of dividends. 
B) requires that all transactions must be shown on the income statement. 
C) has a primary drawback because it allows management to manipulate the income figure to a certain extent. 
D) allows items that are not necessarily under management's control, such as natural disasters, to be shown as an adjustment of retained earnings.

Question 6

Select the best answer from the list below to complete statements that follow.  
-Assuming no preferred stock exists, total stockholders' equity divided by the number of shares of common stock outstanding is equal to ________________________________________.

Accepted Answer

book value

Question 7

Mendes Charters reported the following information at December 31, 2015:   Mendes' total contributed capital is

Accepted Answer

A)  $ \$ 650,000 $ 
B)  $ \$ 675,000 $ 
C)  $ \$ 1,500,000 $ 
D)  $ \$ 625,000 $ 
A)  $ \$ 650,000 $ 
B)  $ \$ 675,000 $ 
C)  $ \$ 1,500,000 $ 
D)  $ \$ 625,000 $

Question 8

Vegas Finance Company reported the following:
Common stock, $10 par, 100,000 shares authorized, 80,000 shares issued and outstanding
What is the effect of issuing 1,000 shares of common stock at $15 per share?

Accepted Answer

A) Cash increases $10,000. 
B) Common Stock increases $15,000. 
C) Additional Paid-in Capital increases $5,000. 
D) Retained Earnings increases $5,000. 
A) Cash increases $10,000. 
B) Common Stock increases $15,000. 
C) Additional Paid-in Capital increases $5,000. 
D) Retained Earnings increases $5,000.

Question 9

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Accepted Answer

A) increase Cash and increase Cash Dividend Payable. 
B) decrease Cash Dividend Payable and decrease Cash. 
C) decrease Retained Earnings and increase Cash Dividend Payable. 
D) decrease Cash Dividend Payable and increase Retained Earnings. 
A) increase Cash and increase Cash Dividend Payable. 
B) decrease Cash Dividend Payable and decrease Cash. 
C) decrease Retained Earnings and increase Cash Dividend Payable. 
D) decrease Cash Dividend Payable and increase Retained Earnings.

Question 10

The balance of the $0.50 par value Common Stock account for Murdock Company was $60,000 before its recent 3-for-1 stock split.The market price of the stock was $30 per share before the stock split.What occurred as a result of the stock split?

Accepted Answer

A) The balance in the Retained Earnings account decreased. 
B) The balance in the Common Stock account declined to $20,000. 
C) The market price of the stock was not affected. 
D) The market price of the stock dropped to approximately $10 per share. 
A) The balance in the Retained Earnings account decreased. 
B) The balance in the Common Stock account declined to $20,000. 
C) The market price of the stock was not affected. 
D) The market price of the stock dropped to approximately $10 per share.

Question 11

When stock is issued for a noncash asset, the par value of the stock is the best indicator of the value of the asset.

Accepted Answer

A) True 
 B)False

Question 12

Select the best answer from the list below to complete statements that follow.  
-Stock issued by the firm, but then repurchased and not retired is ________________________.

Accepted Answer

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

Question 13

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

Accepted Answer

A) True 
 B)False

Question 14

With regard to preferred stock,

Accepted Answer

A) its issuance provides no flexibility to the issuing company because its terms always require mandatory dividend payments. 
B) no dividends are expected by the stockholders. 
C) its stockholders may have the right to participate, along with common stockholders, if an extra dividend is declared. 
D) there is a legal requirement for a corporation to declare a dividend on preferred stock. 
A) its issuance provides no flexibility to the issuing company because its terms always require mandatory dividend payments. 
B) no dividends are expected by the stockholders. 
C) its stockholders may have the right to participate, along with common stockholders, if an extra dividend is declared. 
D) there is a legal requirement for a corporation to declare a dividend on preferred stock.

Question 15

[APPENDIX] Debbie and Alex formed a new partnership.The partnership agreement specified that income should be allocated in a 2-to-1 ratio, with Debbie receiving the larger portion.If revenue for the first year was $90,000 and expenses were $60,000, how much would be allocated to each partner?

Accepted Answer

A) Debbie-$45,000; Alex-$45,000 
B) Debbie-$20,000; Alex-$10,000 
C) Debbie-$60,000; Alex-$30,000 
D) Debbie-$40,000; Alex-$20,000 
A) Debbie-$45,000; Alex-$45,000 
B) Debbie-$20,000; Alex-$10,000 
C) Debbie-$60,000; Alex-$30,000 
D) Debbie-$40,000; Alex-$20,000

Question 16

Select the best answer from the list below to complete statements that follow.  
-Net income that has been earned by the corporation but not paid out as dividends are
______________________________.

Accepted Answer

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

Question 17

Treasury stock is reported as a reduction in stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 18

Museum Corporation acquired a new manufacturing building by issuing 10,000 shares of its $50 par value preferred stock with a $75 per share market price.Similar buildings have recently cost $780,000.What are the effects of this transaction on the accounting equation for Museum?

Accepted Answer

A) Building and Preferred Stock increase $780,000. 
B) Building and Preferred Stock increase $500,000. 
C) Building increases $780,000; Preferred Stock increases $500,000; Additional Paid­in Capital-Preferred increases $280,000. 
D) Building increases $750,000; Preferred Stock increases $500,000; Additional Paid­in Capital-Preferred increases $250,000. 
A) Building and Preferred Stock increase $780,000. 
B) Building and Preferred Stock increase $500,000. 
C) Building increases $780,000; Preferred Stock increases $500,000; Additional Paid­in Capital-Preferred increases $280,000. 
D) Building increases $750,000; Preferred Stock increases $500,000; Additional Paid­in Capital-Preferred increases $250,000.

Question 19

The document that specifies how much the owners will invest, what their salaries will be, and how profits will be shared in a partnership is known as a .

Accepted Answer

partnershi

Question 20

The FASB has allowed certain items to be reported directly to stockholders' equity in an effort to mitigate the possibility of income fluctuating widely from period to period.

Accepted Answer

A) True 
 B)False

If a company has both common and preferred shares outstanding and wishes to calculate book value per share,

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

A company issued 4,000 shares of $5 par common stock for $30 per share.The company purchased 1,200 shares as treasury stock at $32 per share.Later, the company reissued 400 shares of the treasury stock at $34 per share.Which of the following is true?

Which of the following transactions has an effect on the statement of cash flows?

FASB's concept of comprehensive income

Select the best answer from the list below to complete statements that follow. -Assuming no preferred stock exists, total stockholders' equity divided by the number of shares of common stock outstanding is equal to ________________________________________.

Mendes Charters reported the following information at December 31, 2015: Mendes' total contributed capital is

Vegas Finance Company reported the following: Common stock, $10 par, 100,000 shares authorized, 80,000 shares issued and outstanding What is the effect of issuing 1,000 shares of common stock at $15 per share?

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

The balance of the $0.50 par value Common Stock account for Murdock Company was $60,000 before its recent 3-for-1 stock split.The market price of the stock was $30 per share before the stock split.What occurred as a result of the stock split?

When stock is issued for a noncash asset, the par value of the stock is the best indicator of the value of the asset.

Select the best answer from the list below to complete statements that follow. -Stock issued by the firm, but then repurchased and not retired is ________________________.

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

With regard to preferred stock,

[APPENDIX] Debbie and Alex formed a new partnership.The partnership agreement specified that income should be allocated in a 2-to-1 ratio, with Debbie receiving the larger portion.If revenue for the first year was $90,000 and expenses were $60,000, how much would be allocated to each partner?

Select the best answer from the list below to complete statements that follow. -Net income that has been earned by the corporation but not paid out as dividends are ______________________________.

Treasury stock is reported as a reduction in stockholders' equity.

Museum Corporation acquired a new manufacturing building by issuing 10,000 shares of its $50 par value preferred stock with a $75 per share market price.Similar buildings have recently cost $780,000.What are the effects of this transaction on the accounting equation for Museum?

The document that specifies how much the owners will invest, what their salaries will be, and how profits will be shared in a partnership is known as a .

The FASB has allowed certain items to be reported directly to stockholders' equity in an effort to mitigate the possibility of income fluctuating widely from period to period.

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

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Exam 11: Stockholders Equity

If a company has both common and preferred shares outstanding and wishes to calculate book value per share,

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

A company issued 4,000 shares of $5 par common stock for $30 per share.The company purchased 1,200 shares as treasury stock at $32 per share.Later, the company reissued 400 shares of the treasury stock at $34 per share.Which of the following is true?

Which of the following transactions has an effect on the statement of cash flows?

FASB's concept of comprehensive income

Select the best answer from the list below to complete statements that follow. -Assuming no preferred stock exists, total stockholders' equity divided by the number of shares of common stock outstanding is equal to ________________________________________.

Mendes Charters reported the following information at December 31, 2015: Mendes' total contributed capital is

Vegas Finance Company reported the following: Common stock, $10 par, 100,000 shares authorized, 80,000 shares issued and outstanding What is the effect of issuing 1,000 shares of common stock at $15 per share?

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

The balance of the $0.50 par value Common Stock account for Murdock Company was $60,000 before its recent 3-for-1 stock split.The market price of the stock was $30 per share before the stock split.What occurred as a result of the stock split?

When stock is issued for a noncash asset, the par value of the stock is the best indicator of the value of the asset.

Select the best answer from the list below to complete statements that follow. -Stock issued by the firm, but then repurchased and not retired is ________________________.

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

With regard to preferred stock,

[APPENDIX] Debbie and Alex formed a new partnership.The partnership agreement specified that income should be allocated in a 2-to-1 ratio, with Debbie receiving the larger portion.If revenue for the first year was $90,000 and expenses were $60,000, how much would be allocated to each partner?

Select the best answer from the list below to complete statements that follow. -Net income that has been earned by the corporation but not paid out as dividends are ______________________________.

Treasury stock is reported as a reduction in stockholders' equity.

Museum Corporation acquired a new manufacturing building by issuing 10,000 shares of its $50 par value preferred stock with a $75 per share market price.Similar buildings have recently cost $780,000.What are the effects of this transaction on the accounting equation for Museum?

The document that specifies how much the owners will invest, what their salaries will be, and how profits will be shared in a partnership is known as a .

The FASB has allowed certain items to be reported directly to stockholders' equity in an effort to mitigate the possibility of income fluctuating widely from period to period.

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