Question 1

The concept of an "artificial being" refers to which form of business organization?

Accepted Answer

A)  Partnership 
B)  Sole proprietorship 
C)  Corporation 
D)  Limited partnership 
A)  Partnership 
B)  Sole proprietorship 
C)  Corporation 
D)  Limited partnership

Question 2

Johnson Company issued 600 shares of no-par common stock for $10,200. Which of the following journal entries would be made if the stock has no stated value?

Accepted Answer

The answer of Johnson Company issued 600 shares of no-par...

Question 3

The chief accounting officer in a company is known as the

Accepted Answer

A)  controller. 
B)  treasurer. 
C)  vice-president. 
D)  president. 
A)  controller. 
B)  treasurer. 
C)  vice-president. 
D)  president.

Question 4

The acquisition of treasury stock by a corporation

Accepted Answer

A)  increases its total assets and total stockholders' equity. 
B)  decreases its total assets and total stockholders' equity. 
C)  has no effect on total assets and total stockholders' equity. 
D)  requires that a gain or loss be recognized on the income statement. 
A)  increases its total assets and total stockholders' equity. 
B)  decreases its total assets and total stockholders' equity. 
C)  has no effect on total assets and total stockholders' equity. 
D)  requires that a gain or loss be recognized on the income statement.

Question 5

If Kiner Company issues 3,000 shares of $5 par value common stock for $70,000, the account

Accepted Answer

A)  Common Stock will be credited for $15,000. 
B)  Paid-in Capital in Excess of Par Value will be credited for $15,000. 
C)  Paid-in Capital in Excess of Par Value will be credited for $70,000. 
D)  Cash will be debited for $55,000. 
A)  Common Stock will be credited for $15,000. 
B)  Paid-in Capital in Excess of Par Value will be credited for $15,000. 
C)  Paid-in Capital in Excess of Par Value will be credited for $70,000. 
D)  Cash will be debited for $55,000.

Question 6

A stockholder has the right to vote in the election of the board of directors.

Accepted Answer

A) True 
 B)False

Question 7

If stock is issued in exchange for noncash assets, the assets should be valued at the ____________________ of the consideration ___________________ or the assets ____________________, whichever is more clearly evident.

Accepted Answer

fair marke

Question 8

The par value of a stock

Accepted Answer

A)  is legally significant. 
B)  reflects the most recent market price. 
C)  is selected by the SEC. 
D)  is indicative of the worth of the stock. 
A)  is legally significant. 
B)  reflects the most recent market price. 
C)  is selected by the SEC. 
D)  is indicative of the worth of the stock.

Question 9

Which of the following would not be true of a privately held corporation?

Accepted Answer

A)  It is sometimes called a closely held corporation. 
B)  Its shares are regularly traded on the New York Stock Exchange. 
C)  It does not offer its shares for sale to the general public. 
D)  It is usually smaller than a publicly held company. 
A)  It is sometimes called a closely held corporation. 
B)  Its shares are regularly traded on the New York Stock Exchange. 
C)  It does not offer its shares for sale to the general public. 
D)  It is usually smaller than a publicly held company.

Question 10

Stockholders of a corporation directly elect

Accepted Answer

A)  the president of the corporation. 
B)  the board of directors. 
C)  the treasurer of the corporation. 
D)  all of the employees of the corporation. 
A)  the president of the corporation. 
B)  the board of directors. 
C)  the treasurer of the corporation. 
D)  all of the employees of the corporation.

Question 11

Each of the following is reported for common stock except the

Accepted Answer

A)  par value. 
B)  shares issued. 
C)  shares outstanding. 
D)  liquidation value. 
A)  par value. 
B)  shares issued. 
C)  shares outstanding. 
D)  liquidation value.

Question 12

On January 2, 2007, Pacer Corporation issued 30,000 shares of 6% cumulative preferred stock at $100 par value. On December 31, 2010, Pacer Corporation declared and paid its first dividend. What dividends are the preferred stockholders entitled to receive in the current year before any distribution is made to common stockholders?

Accepted Answer

A)  $0 
B)  $180,000 
C)  $540,000 
D)  $720,000 
A)  $0 
B)  $180,000 
C)  $540,000 
D)  $720,000

Question 13

In the financial statements, organization costs appears

Accepted Answer

A)  immediately below Retained Earnings in the stockholders' equity section. 
B)  in the income statement. 
C)  as part of paid-in capital in the stockholders' equity section. 
D)  as an intangible asset. 
A)  immediately below Retained Earnings in the stockholders' equity section. 
B)  in the income statement. 
C)  as part of paid-in capital in the stockholders' equity section. 
D)  as an intangible asset.

Question 14

Yunger Corporation has the following stockholders' equity accounts on January 1, 2010:   
The company uses the cost method to account for treasury stock transactions. During 2010, the following treasury stock transactions occurred:
April 1 Purchased 10,000 shares at $16 per share.
August 1 Sold 4,000 shares at $18 per share.
October 1 Sold 4,000 shares at $15 per share.
Instructions
(a) Journalize the treasury stock transactions for 2010.
(b) Prepare the Stockholders' Equity section of the balance sheet for Yunger Corporation at December 31, 2010. Assume net income was $110,000 for 2010.

Accepted Answer

The answer of Yunger Corporation has the following stockholders' equity...

Question 15

The officer who is generally responsible for maintaining the cash position of the corporation is the

Accepted Answer

A)  controller. 
B)  treasurer. 
C)  cashier. 
D)  internal auditor. 
A)  controller. 
B)  treasurer. 
C)  cashier. 
D)  internal auditor.

Question 16

Rancho Corporation sold 200 shares of treasury stock for $40 per share. The cost for the shares was $30. The entry to record the sale will include a

Accepted Answer

A)  credit to Gain on Sale of Treasury Stock for $6,000. 
B)  credit to Paid-in Capital from Treasury Stock for $2,000. 
C)  debit to Paid-in Capital in Excess of Par Value for $2,000. 
D)  credit to Treasury Stock for $8,000. 
A)  credit to Gain on Sale of Treasury Stock for $6,000. 
B)  credit to Paid-in Capital from Treasury Stock for $2,000. 
C)  debit to Paid-in Capital in Excess of Par Value for $2,000. 
D)  credit to Treasury Stock for $8,000.

Question 17

The purchase of treasury stock

Accepted Answer

A)  decreases common stock authorized. 
B)  decreases common stock issued. 
C)  decreases common stock outstanding. 
D)  has no effect on common stock outstanding. 
A)  decreases common stock authorized. 
B)  decreases common stock issued. 
C)  decreases common stock outstanding. 
D)  has no effect on common stock outstanding.

Question 18

Tyler Corporation has 100,000 shares of $40 par value preferred stock authorized. During the year, it had the following transactions related to its preferred stock.
(a) Issued 20,000 shares at $55 per share.
(b) Issued 10,000 shares for equipment having a $700,000 asking price. The stock had a market value of $65 per share
Instructions
Journalize the transactions.

Accepted Answer

The answer of Tyler Corporation has 100,000 shares of $40...

Question 19

New Corp. issues 2,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to

Accepted Answer

A)  Common Stock $20,000 and Paid-in Capital in Excess of Stated Value $8,000. 
B)  Common Stock $28,000. 
C)  Common Stock $20,000 and Paid-in Capital in Excess of Par Value $8,000. 
D)  Common Stock $20,000 and Retained Earnings $8,000. 
A)  Common Stock $20,000 and Paid-in Capital in Excess of Stated Value $8,000. 
B)  Common Stock $28,000. 
C)  Common Stock $20,000 and Paid-in Capital in Excess of Par Value $8,000. 
D)  Common Stock $20,000 and Retained Earnings $8,000.

Question 20

Additional paid-in capital includes all of the following except the amounts paid in

Accepted Answer

A)  over par value. 
B)  over stated value. 
C)  from treasury stock. 
D)  for the par value of common stock. 
A)  over par value. 
B)  over stated value. 
C)  from treasury stock. 
D)  for the par value of common stock.

Exam 13: Corporations: Organization and Capital Stock Transactions

The concept of an "artificial being" refers to which form of business organization?

Johnson Company issued 600 shares of no-par common stock for $10,200. Which of the following journal entries would be made if the stock has no stated value?

The chief accounting officer in a company is known as the

The acquisition of treasury stock by a corporation

If Kiner Company issues 3,000 shares of $5 par value common stock for $70,000, the account

A stockholder has the right to vote in the election of the board of directors.

If stock is issued in exchange for noncash assets, the assets should be valued at the ____________________ of the consideration ___________________ or the assets ____________________, whichever is more clearly evident.

The par value of a stock

Which of the following would not be true of a privately held corporation?

Stockholders of a corporation directly elect

Each of the following is reported for common stock except the

In the financial statements, organization costs appears

The officer who is generally responsible for maintaining the cash position of the corporation is the

Rancho Corporation sold 200 shares of treasury stock for $40 per share. The cost for the shares was $30. The entry to record the sale will include a

The purchase of treasury stock

New Corp. issues 2,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to

Additional paid-in capital includes all of the following except the amounts paid in

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

If stock is issued in exchange for noncash assets, the assets should be valued at the __________ of the consideration _ or the assets ____________, whichever is more clearly evident.