Question 1

Common Stock Subscribed is:

Accepted Answer

A)  shown as an equity account below Issued Common Stock. 
B)  a contra-asset account. 
C)  a receivables account. 
D)  shown on the income statement as a revenue. 
A)  shown as an equity account below Issued Common Stock. 
B)  a contra-asset account. 
C)  a receivables account. 
D)  shown on the income statement as a revenue. A

Question 2

The financial loss that each stockholder in a corporation can incur is limited.

Accepted Answer

A) True 
 B)False  True

Question 3

Prepare the journal entries for Blitz Industries:
Aug 10 Issued 12,000 shares of $12 par value common stock for $150,000
Aug 20 Issued 6,000 shares of 8%, $25 par value preferred stock for $200,000

Accepted Answer

The answer of Prepare the journal entries for Blitz Industries:
Aug...

Question 4

No-par value stock with an assigned amount determined by the corporation's board of directors is:

Accepted Answer

A)  par value. 
B)  stated value. 
C)  book value. 
D)  market value. 
A)  par value. 
B)  stated value. 
C)  book value. 
D)  market value.

Question 5

A company can exchange stock for noncash assets.

Accepted Answer

A) True 
 B)False

Question 6

Each share of a corporation's capital stock gives its owner the right to:

Accepted Answer

A)  vote at stockholders' meetings. 
B)  set company policy. 
C)  manage the daily operations of the business. 
D)  determine the amount of dividends to be paid. 
A)  vote at stockholders' meetings. 
B)  set company policy. 
C)  manage the daily operations of the business. 
D)  determine the amount of dividends to be paid.

Question 7

Dividends owed to cumulative preferred stockholders that must be paid before common stockholders can receive their dividends are:

Accepted Answer

A)  common stock. 
B)  preferred stock. 
C)  stated value stock. 
D)  dividends in arrears. 
A)  common stock. 
B)  preferred stock. 
C)  stated value stock. 
D)  dividends in arrears.

Question 8

The Blanche Corporation issued 50 shares of $28 par value stock to its accountant. The shares are in full payment for her $1,600 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 $1,600. 
B)  debit to Common Stock for $1,600. 
C)  credit to Common Stock for $1,400. 
D)  debit to Common Stock for $1,400. 
A)  credit to Common Stock for $1,600. 
B)  debit to Common Stock for $1,600. 
C)  credit to Common Stock for $1,400. 
D)  debit to Common Stock for $1,400.

Question 9

The corporation's charter and the articles of incorporation are available for the public to view.

Accepted Answer

A) True 
 B)False

Question 10

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transaction.
-Sold common stock at a price equal to the par value.
Debit ________ Credit ________

Accepted Answer

A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense 
A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense

Question 11

Nonparticipating preferred stock allows stockholders an opportunity to receive a higher percentage of dividends than promised, before any dividends are paid to common stockholders.

Accepted Answer

A) True 
 B)False

Question 12

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transaction.
-Exchanged common stock for services of corporation organizers (valued above par).
Debit ________ Credit ________ & ________

Accepted Answer

A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense 
A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense

Question 13

Paid-in capital represents:

Accepted Answer

A)  the cumulative earnings of the company. 
B)  the investments of the owners into the company. 
C)  the undistributed earnings of the company. 
D)  None of the above 
A)  the cumulative earnings of the company. 
B)  the investments of the owners into the company. 
C)  the undistributed earnings of the company. 
D)  None of the above

Question 14

Stockholders:

Accepted Answer

A)  own stock in the corporation. 
B)  are officers elected to represent the company. 
C)  establish policies for the company. 
D)  are a government agency. 
A)  own stock in the corporation. 
B)  are officers elected to represent the company. 
C)  establish policies for the company. 
D)  are a government agency.

Question 15

The stockholders of a corporation have mutual agency.

Accepted Answer

A) True 
 B)False

Question 16

Jane Kathryn has 15,000 shares outstanding of $15 par value, 5% preferred stock and 100,000 shares outstanding $10 par value common stock. In the first 3 years of operations, the company paid dividends in Year 1, $0; Year 2, $10,000; Year 3, $20,000. Calculate the dividend paid to preferred and common stockholders under the following independent situations:
a) Preferred is non-cumulative and nonparticipating.   
b) Preferred is cumulative and nonparticipating.

Accepted Answer

a) Preferred is non-cumulative

Question 17

When a company sells stock at an amount less then par value, the amount is referred to as:

Accepted Answer

A)  a discount. 
B)  a premium. 
C)  a bonus. 
D)  Companies cannot sell stock for more than par value. 
A)  a discount. 
B)  a premium. 
C)  a bonus. 
D)  Companies cannot sell stock for more than par value.

Question 18

To calculate dividends on par-value preferred stock:

Accepted Answer

A)  multiply the number of shares issued times rate. 
B)  multiply rate times par-value per share. 
C)  multiply number of shares outstanding times rate times par-value. 
D)  None of these answers is correct. 
A)  multiply the number of shares issued times rate. 
B)  multiply rate times par-value per share. 
C)  multiply number of shares outstanding times rate times par-value. 
D)  None of these answers is correct.

Question 19

Stated value means market value.

Accepted Answer

A) True 
 B)False

Question 20

Using the following accounts:
Indicate the account(s) to be debited and credited to record the following transaction.
-Exchanged preferred stock for a building when the stock was selling at a premium.
Debit ________ Credit ________ & ________

Accepted Answer

A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense 
A) Subscription receivable-common stock 
B) Cash 
C) Machinery 
D) Building 
E) Land
F)Organization costs
G)Preferred stock
H)Common stock
I)Paid in capital in excess of par value - common
J)Paid in capital in excess of par value - preferred
K)Common stock subscribed
L)Discount on common stock
M)Organization Expense

Exam 18: Corporations: Organizations and Stock

Common Stock Subscribed is:

The financial loss that each stockholder in a corporation can incur is limited.

Prepare the journal entries for Blitz Industries: Aug 10 Issued 12,000 shares of $12 par value common stock for $150,000 Aug 20 Issued 6,000 shares of 8%, $25 par value preferred stock for $200,000

No-par value stock with an assigned amount determined by the corporation's board of directors is:

A company can exchange stock for noncash assets.

Each share of a corporation's capital stock gives its owner the right to:

Dividends owed to cumulative preferred stockholders that must be paid before common stockholders can receive their dividends are:

The Blanche Corporation issued 50 shares of $28 par value stock to its accountant. The shares are in full payment for her $1,600 fee for assistance in setting up the new company. The entry to record the issuance of the stock would include a:

The corporation's charter and the articles of incorporation are available for the public to view.

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Sold common stock at a price equal to the par value. Debit ________ Credit ________

Nonparticipating preferred stock allows stockholders an opportunity to receive a higher percentage of dividends than promised, before any dividends are paid to common stockholders.

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued above par). Debit ________ Credit ________ & ________

Paid-in capital represents:

Stockholders:

The stockholders of a corporation have mutual agency.

When a company sells stock at an amount less then par value, the amount is referred to as:

To calculate dividends on par-value preferred stock:

Stated value means market value.

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged preferred stock for a building when the stock was selling at a premium. Debit ________ Credit ________ & ________

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

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Sold common stock at a price equal to the par value. Debit Credit

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged common stock for services of corporation organizers (valued above par). Debit Credit &

Using the following accounts: Indicate the account(s) to be debited and credited to record the following transaction. -Exchanged preferred stock for a building when the stock was selling at a premium. Debit Credit &