Question 1

When a company is liquidated, the common shares will receive proceeds before the preferred shares.

Accepted Answer

A) True 
 B)False

Question 2

Kean's Pumping, Inc. has 20,000, $4, cumulative preferred shares issued at $150, and 100,000 common shares issued at $1, at December 31, 2014. If the board of directors declares a $60,000 dividend, the

Accepted Answer

A)  preferred shareholders will receive 1/10th of what the common shareholders will receive. 
B)  preferred shareholders will receive the entire $60,000. 
C)  $60,000 will be held as restricted retained earnings and paid out at some future date. 
D)  preferred shareholders will receive $30,000 and the common shareholders will receive $30,000. 
A)  preferred shareholders will receive 1/10th of what the common shareholders will receive. 
B)  preferred shareholders will receive the entire $60,000. 
C)  $60,000 will be held as restricted retained earnings and paid out at some future date. 
D)  preferred shareholders will receive $30,000 and the common shareholders will receive $30,000.

Question 3

Match between columns
                        Premises: Government regulations
Continuous life
Ability to acquire capital
Potential for deferred or reduced tax
Transferable ownership rights
Limited liability of shareholders
Potential for additional tax
Separate legal entity

Accepted Answer

The Answer of Advantage and Disadvantage is...

Question 4

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

Accepted Answer

A)  the fair market value of the asset acquired. 
B)  the original cost of the asset acquired. 
C)  the fair market value of the common shares given up. 
D)  the book value of the common shares given up. 
A)  the fair market value of the asset acquired. 
B)  the original cost of the asset acquired. 
C)  the fair market value of the common shares given up. 
D)  the book value of the common shares given up.

Question 5

A distribution of a corporation's profit to its shareholders is referred to as

Accepted Answer

A)  a shareholder bonus. 
B)  wages and salaries expense. 
C)  a share distribution. 
D)  a dividend. 
A)  a shareholder bonus. 
B)  wages and salaries expense. 
C)  a share distribution. 
D)  a dividend.

Question 6

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Accepted Answer

A)  corporation is organized for the purpose of making a profit. 
B)  corporation is subject to numerous federal and provincial government regulations. 
C)  corporation is an accounting economic entity. 
D)  corporation's temporary accounts are closed at the end of the accounting period. 
A)  corporation is organized for the purpose of making a profit. 
B)  corporation is subject to numerous federal and provincial government regulations. 
C)  corporation is an accounting economic entity. 
D)  corporation's temporary accounts are closed at the end of the accounting period.

Question 7

Companies must have enough cash before they can declare a cash dividend.

Accepted Answer

A) True 
 B)False

Question 8

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 Toronto 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 Toronto 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 9

Dividends in arrears are not considered a liability.

Accepted Answer

A) True 
 B)False

Question 10

Under IFRS, there is a section in Shareholders Equity on the balance sheet called accumulated other comprehensive income.

Accepted Answer

A) True 
 B)False

Question 11

In cases where the fair value of the services and noncash assets cannot be reliably measured, the shares issued should be recorded at the amortized cost of the noncash assets.

Accepted Answer

A) True 
 B)False

Question 12

Dividends in arrears on cumulative preferred shares

Accepted Answer

A)  are considered to be a non-current liability. 
B)  are considered to be a current liability. 
C)  only occur when preferred dividends have been declared. 
D)  should be disclosed in the notes to the financial statements. 
A)  are considered to be a non-current liability. 
B)  are considered to be a current liability. 
C)  only occur when preferred dividends have been declared. 
D)  should be disclosed in the notes to the financial statements.

Question 13

The ways that a corporation can be classified by purpose are

Accepted Answer

A)  general and limited. 
B)  profit and non-profit. 
C)  provincial and federal. 
D)  publicly held and privately held. 
A)  general and limited. 
B)  profit and non-profit. 
C)  provincial and federal. 
D)  publicly held and privately held.

Question 14

The statement that reflects the changes in retained earnings for the period is called a statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 15

The statement of retained earnings

Accepted Answer

A)  is required as part of the financial statements under ASPE. 
B)  will show income taxes paid during the year. 
C)  will never show losses. 
D)  will, in some cases, fail to reconcile the beginning and ending retained earnings balances. 
A)  is required as part of the financial statements under ASPE. 
B)  will show income taxes paid during the year. 
C)  will never show losses. 
D)  will, in some cases, fail to reconcile the beginning and ending retained earnings balances.

Question 16

Dividends are declared out of

Accepted Answer

A)  Common Shares. 
B)  Preferred Shares. 
C)  Retained Earnings. 
D)  Profit. 
A)  Common Shares. 
B)  Preferred Shares. 
C)  Retained Earnings. 
D)  Profit.

Question 17

When the retained earnings has a debit balance it is called a "deficit".

Accepted Answer

A) True 
 B)False

Question 18

Dividends are distributed from retained earnings.

Accepted Answer

A) True 
 B)False

Question 19

Which one of the following would NOT be considered an advantage of the corporate form of organization?

Accepted Answer

A)  Limited liability of owners 
B)  Separate legal existence 
C)  Continuous life 
D)  Government regulation 
A)  Limited liability of owners 
B)  Separate legal existence 
C)  Continuous life 
D)  Government regulation

Question 20

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Accepted Answer

A)  additional taxes 
B)  government regulations 
C)  limited liability of shareholders 
D)  separation of ownership and management 
A)  additional taxes 
B)  government regulations 
C)  limited liability of shareholders 
D)  separation of ownership and management

When a company is liquidated, the common shares will receive proceeds before the preferred shares.

Kean's Pumping, Inc. has 20,000, $4, cumulative preferred shares issued at $150, and 100,000 common shares issued at $1, at December 31, 2014. If the board of directors declares a $60,000 dividend, the

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

A distribution of a corporation's profit to its shareholders is referred to as

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Companies must have enough cash before they can declare a cash dividend.

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

Dividends in arrears are not considered a liability.

Under IFRS, there is a section in Shareholders Equity on the balance sheet called accumulated other comprehensive income.

In cases where the fair value of the services and noncash assets cannot be reliably measured, the shares issued should be recorded at the amortized cost of the noncash assets.

Dividends in arrears on cumulative preferred shares

The ways that a corporation can be classified by purpose are

The statement that reflects the changes in retained earnings for the period is called a statement of retained earnings.

The statement of retained earnings

Dividends are declared out of

When the retained earnings has a debit balance it is called a "deficit".

Dividends are distributed from retained earnings.

Which one of the following would NOT be considered an advantage of the corporate form of organization?

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 13: Introduction to Corporations

When a company is liquidated, the common shares will receive proceeds before the preferred shares.

Kean's Pumping, Inc. has 20,000, $4, cumulative preferred shares issued at $150, and 100,000 common shares issued at $1, at December 31, 2014. If the board of directors declares a $60,000 dividend, the

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

A distribution of a corporation's profit to its shareholders is referred to as

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Companies must have enough cash before they can declare a cash dividend.

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

Dividends in arrears are not considered a liability.

Under IFRS, there is a section in Shareholders Equity on the balance sheet called accumulated other comprehensive income.

In cases where the fair value of the services and noncash assets cannot be reliably measured, the shares issued should be recorded at the amortized cost of the noncash assets.

Dividends in arrears on cumulative preferred shares

The ways that a corporation can be classified by purpose are

The statement that reflects the changes in retained earnings for the period is called a statement of retained earnings.

The statement of retained earnings

Dividends are declared out of

When the retained earnings has a debit balance it is called a "deficit".

Dividends are distributed from retained earnings.

Which one of the following would NOT be considered an advantage of the corporate form of organization?

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters