Question 1

Which statement about the "ex-dividend date" is correct?

Accepted Answer

A) The ex-dividend date relates only to shares that are publicly traded. 
B) An investor who buys shares before the ex-dividend date does not have the right to receive a dividend that has been declared. 
C) The ex-dividend date will occur after the record date. 
D) An investor who buys shares on or after the ex-dividend date has the right to receive a dividend that has been declared. 
A) The ex-dividend date relates only to shares that are publicly traded. 
B) An investor who buys shares before the ex-dividend date does not have the right to receive a dividend that has been declared. 
C) The ex-dividend date will occur after the record date. 
D) An investor who buys shares on or after the ex-dividend date has the right to receive a dividend that has been declared.

Question 2

Assume that a company issued 10,000 shares for $30 and a par value of $2/share. What entry would be required to record the repurchase and cancellation of 1,000 shares at $28/share?

Accepted Answer

A) Debit to common shares for $2,000. 
B) Debit to common shares for $28,000. 
C) Debit to contributed surplus for $1,000. 
D) Credit to contributed surplus for $1,000. 
A) Debit to common shares for $2,000. 
B) Debit to common shares for $28,000. 
C) Debit to contributed surplus for $1,000. 
D) Credit to contributed surplus for $1,000.

Question 3

What is a "stock split"?

Accepted Answer

A) It is an increase in the number of shares issued for which book value consideration is received from investors. 
B) It is an increase in the number of shares issued for which no consideration is received from investors. 
C) It is an increase in the number of shares issued for which par value consideration is received from investors. 
D) It is an increase in the number of shares issued for which market value consideration is received from investors. 
A) It is an increase in the number of shares issued for which book value consideration is received from investors. 
B) It is an increase in the number of shares issued for which no consideration is received from investors. 
C) It is an increase in the number of shares issued for which par value consideration is received from investors. 
D) It is an increase in the number of shares issued for which market value consideration is received from investors.

Question 4

Assume that a company issued 10,000 shares for $30/share and a par value of $5/share. 1,000 shares were repurchased back at $22/share. Which statement about share repurchases and cancellation is correct?

Accepted Answer

A) Contributed surplus from the share repurchase can be netted against the contributed surplus from share issuance. 
B) Contributed surplus from the share repurchase must be separated from the contributed surplus on share issuance. 
C) Contributed surplus arising from share repurchase must be debited in this transaction. 
D) Contributed surplus from the initial share issuance must now be credited in this transaction. 
A) Contributed surplus from the share repurchase can be netted against the contributed surplus from share issuance. 
B) Contributed surplus from the share repurchase must be separated from the contributed surplus on share issuance. 
C) Contributed surplus arising from share repurchase must be debited in this transaction. 
D) Contributed surplus from the initial share issuance must now be credited in this transaction.

Question 5

Briefly describe the primary reason why companies declare a stock split.

Accepted Answer

Companies engage in stock splits typical

Question 6

Briefly describe the difference between issued and outstanding shares.

Accepted Answer

Issued shares are the net numb

Question 7

In which account would "transactions with non-owners" be reported?

Accepted Answer

A) Appropriated reserves. 
B) Common shares. 
C) Contributed surplus. 
D) Preferred shares. 
A) Appropriated reserves. 
B) Common shares. 
C) Contributed surplus. 
D) Preferred shares.

Question 8

When does a company record dividends payable?

Accepted Answer

A) On date of record. 
B) On ex-dividend date. 
C) On payment date. 
D) On declaration date. 
A) On date of record. 
B) On ex-dividend date. 
C) On payment date. 
D) On declaration date.

Question 9

Which statement about a "share buyback" is correct?

Accepted Answer

A) The EPS of the company will decrease after a share buyback. 
B) Share buy-back decreases the information asymmetry for investors. 
C) It is an administratively cumbersome way to award stock compensation. 
D) Accounting is the same whether repurchased shares are cancelled or not. 
A) The EPS of the company will decrease after a share buyback. 
B) Share buy-back decreases the information asymmetry for investors. 
C) It is an administratively cumbersome way to award stock compensation. 
D) Accounting is the same whether repurchased shares are cancelled or not.

Question 10

What are three potential outcomes for defaults on share subscriptions?

Accepted Answer

(i)refund the cash paid and cancel the c

Question 11

Which statement about contributed surplus is correct?

Accepted Answer

A) Contributed surplus can only arise from the issuance of shares. 
B) Contributed surplus can arise from the issuance of stock options. 
C) Contributed surplus arising from share repurchase gives rise to a debit journal entry. 
D) Contributed surplus arising from share issuance gives rise to a debit journal entry. 
A) Contributed surplus can only arise from the issuance of shares. 
B) Contributed surplus can arise from the issuance of stock options. 
C) Contributed surplus arising from share repurchase gives rise to a debit journal entry. 
D) Contributed surplus arising from share issuance gives rise to a debit journal entry.

Question 12

Which statement about a "stock split" is correct?

Accepted Answer

A) The economic position of the investors is diluted after a stock split. 
B) The economic position of the investors is increased after a stock split. 
C) The economic position of the investors is decreased after a stock split. 
D) The economic position of the investors is unaffected after a stock split. 
A) The economic position of the investors is diluted after a stock split. 
B) The economic position of the investors is increased after a stock split. 
C) The economic position of the investors is decreased after a stock split. 
D) The economic position of the investors is unaffected after a stock split.

Question 13

Which of the following statements is correct?

Accepted Answer

A) Only a memo entry is needed for stock dividends transactions. 
B) The date of record of cash dividends is the date when the funds for the dividend are transferred to shareholders 
C) The ex-dividend date relates only to shares that are publicly traded. 
D) A company will record dividends payable on the ex-dividend date. 
A) Only a memo entry is needed for stock dividends transactions. 
B) The date of record of cash dividends is the date when the funds for the dividend are transferred to shareholders 
C) The ex-dividend date relates only to shares that are publicly traded. 
D) A company will record dividends payable on the ex-dividend date.

Question 14

What is the primary difference between common and preferred shares?

Accepted Answer

The primary difference between

Question 15

Pixel Points Inc. has a single class of shares. As at its year ended December 31, 2020, the company had 1,000,000 shares issued and outstanding. These shares have a book value of $5,000,000 on the balance sheet.
During 2021, Pixel Points repurchased 5% of the issued shares from one of the minority shareholders at a cost of $7 per share. The company held these shares in treasury and later found a buyer for half of these shares at $8 per share. The other shares were sold at $6 to another investor.
Required:
Assume the Pixel Points fallows the guidance in ASPE pertaining to accounting for equity transactions. Record the share transactions using the two-transaction method for treasury shares.

Accepted Answer

The answer of Pixel Points Inc. has a single class...

Question 16

Explain the meaning of "contributed capital" and "common share." What distinguishes a common share from a preferred share?

Accepted Answer

common share: An equity interest that ha

Question 17

Briefly describe recycling as it pertains to other comprehensive income.

Accepted Answer

Recycling of OCI refers to the

Question 18

What is the meaning of "shares authorized," "shares issued," and "shares outstanding"?

Accepted Answer

shares authorized: The number of shares

Which statement about the "ex-dividend date" is correct?

Assume that a company issued 10,000 shares for $30 and a par value of $2/share. What entry would be required to record the repurchase and cancellation of 1,000 shares at $28/share?

What is a "stock split"?

Assume that a company issued 10,000 shares for $30/share and a par value of $5/share. 1,000 shares were repurchased back at $22/share. Which statement about share repurchases and cancellation is correct?

Briefly describe the primary reason why companies declare a stock split.

Briefly describe the difference between issued and outstanding shares.

In which account would "transactions with non-owners" be reported?

When does a company record dividends payable?

Which statement about a "share buyback" is correct?

What are three potential outcomes for defaults on share subscriptions?

Which statement about contributed surplus is correct?

Which statement about a "stock split" is correct?

Which of the following statements is correct?

What is the primary difference between common and preferred shares?

Explain the meaning of "contributed capital" and "common share." What distinguishes a common share from a preferred share?

Briefly describe recycling as it pertains to other comprehensive income.

What is the meaning of "shares authorized," "shares issued," and "shares outstanding"?

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Accounting for Income Taxes

Accounting Changes

Statement of Cash Flows

Filters

Exam 3: Equities

Which statement about the "ex-dividend date" is correct?

Assume that a company issued 10,000 shares for $30 and a par value of $2/share. What entry would be required to record the repurchase and cancellation of 1,000 shares at $28/share?

What is a "stock split"?

Assume that a company issued 10,000 shares for $30/share and a par value of $5/share. 1,000 shares were repurchased back at $22/share. Which statement about share repurchases and cancellation is correct?

Briefly describe the primary reason why companies declare a stock split.

Briefly describe the difference between issued and outstanding shares.

In which account would "transactions with non-owners" be reported?

When does a company record dividends payable?

Which statement about a "share buyback" is correct?

What are three potential outcomes for defaults on share subscriptions?

Which statement about contributed surplus is correct?

Which statement about a "stock split" is correct?

Which of the following statements is correct?

What is the primary difference between common and preferred shares?

Explain the meaning of "contributed capital" and "common share." What distinguishes a common share from a preferred share?

Briefly describe recycling as it pertains to other comprehensive income.

What is the meaning of "shares authorized," "shares issued," and "shares outstanding"?

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Accounting for Income Taxes

Accounting Changes

Statement of Cash Flows

Filters