Question 1

Which of the following statements regarding partnerships is true?

Accepted Answer

A)  Partnerships have two owners. 
B)  The partnership ends when a new partner is added. 
C)  The partnership is responsible for its own taxes. 
D)  The partnership is a separate legal entity from its owners. 
A)  Partnerships have two owners. 
B)  The partnership ends when a new partner is added. 
C)  The partnership is responsible for its own taxes. 
D)  The partnership is a separate legal entity from its owners.

Question 2

Which of the following is an account in stockholders' equity?

Accepted Answer

A)  Dividends Payable 
B)  Loss on Sale of Equipment 
C)  Retained Earnings 
D)  Net income 
A)  Dividends Payable 
B)  Loss on Sale of Equipment 
C)  Retained Earnings 
D)  Net income

Question 3

Comfort Shoes had the following items included in its accounting records.In the space provided, indicate whether each of the items listed is included in an account in the stockholders' equity section of the balance sheet.​
​ \[\begin{array} { | l l | l | } 
\hline & \text { Item } & \begin{array} { l } 
\text { Included in a Stockholders' } \
\text { Equity account? (yes or no) }
\end{array} \
\hline \text { a. } & \text { Preferred stock issued by Comfort Shoes. } \
\hline \text { b. } & \text { Cash dividend unpaid that was declared last year. } \
\hline \hline \text { c. } & \text { Earnings accumulated but not distributed by Comfort Shoes. } \
\hline \hline \text { d. } & \text { Amount received in excess of cost when treasury stock is reissued } \
& \text { by Comfort Shoes. } & \
\hline \hline \text { e. } & \text { Treasury stock purchased. } \
\hline \text { f. } & \text { Dividends in arrears on Comfort Shoes preferred stock. } \
\hline \text { g. } & \begin{array} { l } 
\text { Amount received in excess of par value when common stock was } \
\text { issued by Comfort Shoes. }
\end{array} \
\hline \hline \text { h. } & \begin{array} { l } 
\text { Stock dividend declared but not yet distributed by Comfort } \
\text { Shoes. }
\end{array} & \
\hline
\end{array}\]

Accepted Answer

The answer of Comfort Shoes had the following items included...

Question 4

Fairchild Company acquired a building valued at $210,000 for property tax purposes in exchange for 6,000 shares of its $10 par common stock.The stock is widely traded and selling for $31 per share.At what amount should the building be recorded by Fairchild Company?

Accepted Answer

A)  $210,000 
B)  $60,000 
C)  $186,000 
D)  $150,000 
A)  $210,000 
B)  $60,000 
C)  $186,000 
D)  $150,000

Question 5

Stock dividends affect the par value per share of the stock.

Accepted Answer

A) True 
 B)False

Question 6

Use the incomplete stockholders' equity section of Box Company's balance sheet as of December 31, 2016, to answer the following question. $\begin{array}{lr}
\text { Common stock, } \$ 7 \text { par, 100,000 shares authorized } & \$ 700,000 \
\text { Additional paid-in capital-common } & 160,000 \
\text { Retained earnings } & ? \
\text { Treasury stock ( } 2,000 \text { shares at cost) } &(16,000) \
\text { Total stockholders' equity } &974,000 \
\end{array}$ ? How many shares of common stock are outstanding?

Accepted Answer

A)  100,000 
B)  98,000 
C)  78,000 
D)  68,000 
A)  100,000 
B)  98,000 
C)  78,000 
D)  68,000

Question 7

Zelienople Co.reported the following information at December 31, 2016: $\begin{array}{lr}
\text { Preferred stock, } \$ 10 \text { par, } 5,000 \text { shares authorized, cumulative } & \$ 50,000 \
\text { Common stock, } \$ 1 \text { par, } 500,000 \text { shares authorized } & 200,000 \
\text { Additional paid-in capital-Common } & 25,000 \
\text { Retained earnings } & 75,000 \
\quad \text { Total contributed capital and retained eamings } & \$ 350,000 \
\text { Less: Treasury stock (400 shares at cost) } & 5,000 \
\hline \text { Total stockholders' equity } & \$ 345,000
\end{array}$ The number of shares of common stock issued is

Accepted Answer

A)  5,000. 
B)  200,000. 
C)  500,000. 
D)  550,000. 
A)  5,000. 
B)  200,000. 
C)  500,000. 
D)  550,000.

Question 8

A liability for dividends is created

Accepted Answer

A)  at the end of each fiscal year. 
B)  at the date of payment. 
C)  at the date of record. 
D)  at the date of declaration. 
A)  at the end of each fiscal year. 
B)  at the date of payment. 
C)  at the date of record. 
D)  at the date of declaration.

Question 9

The stockholders' equity section of Twilight Time's balance sheet on January 1, 2016, appeared as follows: $\begin{array}{lr}
\text { Common stock, \$2 par, } 2,000 \text { shares issued and outstanding } & \$ 4,000 \
\text { Additional paid-in capital-Common } & 1,600 \
\text { Retained earnings } & 5,400 \
\quad \text { Total stockholders' equity } & \$ 11,000
\end{array}$ On March 1, 2016, Twilight reacquired 800 shares of common stock at $10 per share.Twilight sold 400 of the treasury shares on November 15 for $12 per share.The entry to record the sale on November 15 would show:

Accepted Answer

A)  an increase in Gain on Sale of Treasury Stock, $800 
B)  an increase in Common Stock, $4,800 
C)  a decrease in Cash, $4,800 
D)  a decrease in Treasury Stock, $4,000 
A)  an increase in Gain on Sale of Treasury Stock, $800 
B)  an increase in Common Stock, $4,800 
C)  a decrease in Cash, $4,800 
D)  a decrease in Treasury Stock, $4,000

Question 10

The Cloud Co.had the following account balances at December 31, 2016: $\begin{array}{lr}
\text { Retained earnings } & \$ 52,000 \
\text { Treasury stock, } 500 \text { common shares at cost } & (10,000) \
\text { Common stock, } \$ 1 \text { par value, } 10,000 \text { shares authorized, } 4,000 \text { shares outstanding } & 4,000 \
\text { Cash dividends payable - common } & 6,000 \
\text { Additional paid-in capital-common } & 1,200 \
\text { Additional paid-in capital-treasury stock } & 900 \
\text { Common stock dividend distributable } & 6,200
\end{array}$ Prepare the stockholders' equity section of the balance sheet for The Cloud Co.at December 31, 2016.

Accepted Answer

The answer of The Cloud Co.had the following account balances...

Question 11

All of the following statements are true about a 3-for-1 split, except:

Accepted Answer

A)  Total contributed capital increases. 
B)  The market price will probably decrease. 
C)  Par value per share is reduced to one-third of what it was before the split. 
D)  A stockholder with twenty shares before the split owns sixty shares after the split. 
A)  Total contributed capital increases. 
B)  The market price will probably decrease. 
C)  Par value per share is reduced to one-third of what it was before the split. 
D)  A stockholder with twenty shares before the split owns sixty shares after the split.

Question 12

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 13

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

Accepted Answer

A)  The issuance of stock decreases several important financial ratios. 
B)  Issuing bonds dilutes the voting power of the stockholders. 
C)  Corporations are not required to return the investment to the stockholders. 
D)  Investors expect to earn a higher rate of return on stocks than bonds. 
A)  The issuance of stock decreases several important financial ratios. 
B)  Issuing bonds dilutes the voting power of the stockholders. 
C)  Corporations are not required to return the investment to the stockholders. 
D)  Investors expect to earn a higher rate of return on stocks than bonds.

Question 14

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 15

Select the letter of the term each statement best describes.
-Allows preferred stock to be returned to the corporation in exchange for common stock.

Accepted Answer

A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share 
A) authorized shares 
B) issued shares 
C) outstanding shares 
D) par value 
E) additional paid-in capital
F)retained earnings
G)cumulative feature
H)participating feature
I)callable stock
J)treasury stock
K)retirement of stock
L)dividend payout ratio
M)stock dividend
N)stock split
O)market value per share
P)convertible stock
Q)book value per share

Question 16

Lawrenceville Co.reported the following: ​
Common stock, $3 par, 10,000 shares authorized, 5,000 shares issued and outstanding
​
What is the effect of a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?

Accepted Answer

A)  Cash decreases $30,000. 
B)  Retained earnings in the amount of $15,000 is transferred to the contributed capital accounts. 
C)  Additional Paid-in Capital decreases $30,000. 
D)  A stock dividend has no effect on any stockholders' equity accounts. 
A)  Cash decreases $30,000. 
B)  Retained earnings in the amount of $15,000 is transferred to the contributed capital accounts. 
C)  Additional Paid-in Capital decreases $30,000. 
D)  A stock dividend has no effect on any stockholders' equity accounts.

Question 17

The book value per share for a corporation is

Accepted Answer

A)  the market price of the stock. 
B)  the cost of investments in stock of other corporations. 
C)  based on the excess of total assets over total liabilities. 
D)  the amount stockholders would receive if they sold their shares back to the corporation. 
A)  the market price of the stock. 
B)  the cost of investments in stock of other corporations. 
C)  based on the excess of total assets over total liabilities. 
D)  the amount stockholders would receive if they sold their shares back to the corporation.

Question 18

A drawing account is sometimes referred to as a ______________________.

Accepted Answer

withdrawal

Question 19

Anole Company was incorporated as a new business on January 1, 2016.The company is authorized to issue 20,000 shares of $5 par value common stock and 10,000 shares of 6%, $10 par value, cumulative, participating preferred stock.On January 1, 2016, the company issued 8,000 shares of common stock for $15 per share and 2,000 shares of preferred stock for $30 per share.Net income for the year ended December 31, 2016, was $375,000.
​
-Refer to the information about Anole Company. ​
Anole's total stockholders' equity reported on the balance sheet at December 31, 2016, is

Accepted Answer

A)  $60,000. 
B)  $120,000. 
C)  $180,000. 
D)  $555,000. 
A)  $60,000. 
B)  $120,000. 
C)  $180,000. 
D)  $555,000.

Question 20

Arco Corporation declared a cash dividend on June 2 of $6 per common share.The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury.The entry to record the declaration of the cash dividend increases

Accepted Answer

A)  a liability. 
B)  an asset. 
C)  an expense. 
D)  a stockholders' equity account. 
A)  a liability. 
B)  an asset. 
C)  an expense. 
D)  a stockholders' equity account.

Which of the following statements regarding partnerships is true?

Which of the following is an account in stockholders' equity?

Fairchild Company acquired a building valued at $210,000 for property tax purposes in exchange for 6,000 shares of its $10 par common stock.The stock is widely traded and selling for $31 per share.At what amount should the building be recorded by Fairchild Company?

Stock dividends affect the par value per share of the stock.

A liability for dividends is created

All of the following statements are true about a 3-for-1 split, except:

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?

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

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 ______________________.

Select the letter of the term each statement best describes. -Allows preferred stock to be returned to the corporation in exchange for common stock.

Lawrenceville Co.reported the following: Common stock, $3 par, 10,000 shares authorized, 5,000 shares issued and outstanding What is the effect of a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?

The book value per share for a corporation is

A drawing account is sometimes referred to as a ______________________.

Arco Corporation declared a cash dividend on June 2 of $6 per common share.The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury.The entry to record the declaration of the cash dividend increases

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 True Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Exam 11: Stockholders Equity

Which of the following statements regarding partnerships is true?

Which of the following is an account in stockholders' equity?

Fairchild Company acquired a building valued at $210,000 for property tax purposes in exchange for 6,000 shares of its $10 par common stock.The stock is widely traded and selling for $31 per share.At what amount should the building be recorded by Fairchild Company?

Stock dividends affect the par value per share of the stock.

A liability for dividends is created

All of the following statements are true about a 3-for-1 split, except:

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?

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

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 ______________________.

Select the letter of the term each statement best describes. -Allows preferred stock to be returned to the corporation in exchange for common stock.

Lawrenceville Co.reported the following: ​ Common stock, $3 par, 10,000 shares authorized, 5,000 shares issued and outstanding ​ What is the effect of a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?

The book value per share for a corporation is

A drawing account is sometimes referred to as a ______________________.

Arco Corporation declared a cash dividend on June 2 of $6 per common share.The company has 2,000 shares of common stock authorized, 1,000 shares issued, and 200 in the treasury.The entry to record the declaration of the cash dividend increases

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 True Value of Money

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters

Lawrenceville Co.reported the following: Common stock, $3 par, 10,000 shares authorized, 5,000 shares issued and outstanding What is the effect of a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?