Question 1

The statement of stockholders' equity

Accepted Answer

A)  is one of the required financial statements for the annual report, when changes have occurred in the stockholders' equity accounts. 
B)  shows the changes in retained earnings for the period, which includes the increase or decrease as a result of net income or loss for the period, and dividends for the period. 
C)  includes accounts, such as the retained earnings and common stock accounts, but not changes to the retained earnings account, since those items are reported on the statement of retained earnings. 
D)  is used only if a corporation frequently issues common stock. 
A)  is one of the required financial statements for the annual report, when changes have occurred in the stockholders' equity accounts. 
B)  shows the changes in retained earnings for the period, which includes the increase or decrease as a result of net income or loss for the period, and dividends for the period. 
C)  includes accounts, such as the retained earnings and common stock accounts, but not changes to the retained earnings account, since those items are reported on the statement of retained earnings. 
D)  is used only if a corporation frequently issues common stock.

Question 2

The amount received for each share of stock in excess of par value is ______________________.

Accepted Answer

additional

Question 3

Prairie Charters reported the following information at December 31, 2016: $\begin{array}{lr}
\text { Common stock, } \$ 1 \text { par, } 500,000 \text { shares authorized, } 100,000 \text { shares issued } & \$ 100,000 \
\text { Additional paid-in capital-Common } & 25,000 \
\text { Retained earnings } & 75,000 \
\quad \text { Total stockholders' equity } & \$ 250,000
\end{array}$ The average recorded value per share of common stock at December 31, 2016, is

Accepted Answer

A)  $1.00 
B)  $1.75 
C)  $1.25 
D)  $2.50 
A)  $1.00 
B)  $1.75 
C)  $1.25 
D)  $2.50

Question 4

Select the statement on which each of the items provided below would be reported.
-Dividends for the period.

Accepted Answer

A) Statement of retained earnings 
B) Statement of stockholders' equity 
C) Items that may require reporting on either statement 
D) Items not reported on either of the statements 
A) Statement of retained earnings 
B) Statement of stockholders' equity 
C) Items that may require reporting on either statement 
D) Items not reported on either of the statements

Question 5

Authorized stock represents the

Accepted Answer

A)  maximum number of shares that can be issued. 
B)  number of shares that have been sold. 
C)  number of shares that are currently held by stockholders. 
D)  number of shares that have been repurchased by the corporation. 
A)  maximum number of shares that can be issued. 
B)  number of shares that have been sold. 
C)  number of shares that are currently held by stockholders. 
D)  number of shares that have been repurchased by the corporation.

Question 6

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding
What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Accepted Answer

A)  Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts. 
B)  Cash decreases $400,000. 
C)  Additional Paid-in Capital increases $400,000. 
D)  A stock split has no effect on total stockholders' equity. 
A)  Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts. 
B)  Cash decreases $400,000. 
C)  Additional Paid-in Capital increases $400,000. 
D)  A stock split has no effect on total stockholders' equity.

Question 7

Which of the following is true concerning a sole proprietorship?

Accepted Answer

A)  It is a separate legal entity. 
B)  It may have more than one class of stock outstanding. 
C)  It is owned by one or more persons. 
D)  The separate entity concept applies. 
A)  It is a separate legal entity. 
B)  It may have more than one class of stock outstanding. 
C)  It is owned by one or more persons. 
D)  The separate entity concept applies.

Question 8

Tropical Co.declared a cash dividend of $30,000.The entry includes a(n)

Accepted Answer

A)  decrease to Cash of $30,000. 
B)  increase to Retained Earnings of $30,000. 
C)  decrease to Retained Earnings of $30,000. 
D)  decrease to Cash Dividend Payable of $30,000. 
A)  decrease to Cash of $30,000. 
B)  increase to Retained Earnings of $30,000. 
C)  decrease to Retained Earnings of $30,000. 
D)  decrease to Cash Dividend Payable of $30,000.

Question 9

[APPENDIX] A partnership can be owned by one or more entities or individuals.

Accepted Answer

A) True 
 B)False

Question 10

The Treasury Stock account should be considered an asset account.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements regarding partnerships is true?

Accepted Answer

A)  Partnerships must register with the federal government. 
B)  Partnerships pay taxes to the IRS. 
C)  Partners must register with the state government. 
D)  Partners must abide by the separate entity concept and keep their personal assets separate from the partnership assets. 
A)  Partnerships must register with the federal government. 
B)  Partnerships pay taxes to the IRS. 
C)  Partners must register with the state government. 
D)  Partners must abide by the separate entity concept and keep their personal assets separate from the partnership assets.

Question 12

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information, how many shares are outstanding at December 31?

Accepted Answer

A)  15,000 
B)  18,000 
C)  4,500 
D)  3,000 
A)  15,000 
B)  18,000 
C)  4,500 
D)  3,000

Question 13

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity.
-Which item would not be recorded until declared?

Accepted Answer

A) Preferred stock issued by Carlton 
B) Amount received by Carlton in excess of par value when preferred stock was issued 
C) Dividends in arrears on Carlton preferred stock 
D) Cash dividend declared but unpaid on Carlton stock 
E) Stock dividend declared but unissued by Carlton
F)Treasury stock
G)Amount received in excess of cost when treasury stock is reissued by MJ
H)Retained earnings 
A) Preferred stock issued by Carlton 
B) Amount received by Carlton in excess of par value when preferred stock was issued 
C) Dividends in arrears on Carlton preferred stock 
D) Cash dividend declared but unpaid on Carlton stock 
E) Stock dividend declared but unissued by Carlton
F)Treasury stock
G)Amount received in excess of cost when treasury stock is reissued by MJ
H)Retained earnings

Question 14

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

Accepted Answer

A) True 
 B)False

Question 15

The participating feature of stock allows stockholders to sell stock back to the company.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is reported as a financing activity?

Accepted Answer

A)  Declaration of dividends 
B)  Sale of preferred stock 
C)  Conversion of preferred stock to common stock 
D)  Stock split 
A)  Declaration of dividends 
B)  Sale of preferred stock 
C)  Conversion of preferred stock to common stock 
D)  Stock split

Question 17

When the owner of a sole proprietorship withdraws assets from the business for personal use

Accepted Answer

A)  it is treated like a noncash dividend. 
B)  it is illegal because the assets belong to the separate entity, the proprietorship. 
C)  it would be recorded as a loss by the proprietorship. 
D)  it is recorded as a reduction of owner's equity. 
A)  it is treated like a noncash dividend. 
B)  it is illegal because the assets belong to the separate entity, the proprietorship. 
C)  it would be recorded as a loss by the proprietorship. 
D)  it is recorded as a reduction of owner's equity.

Question 18

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Accepted Answer

A)  increase Cash and increase Cash Dividend Payable. 
B)  decrease Cash Dividend Payable and decrease Cash. 
C)  decrease Retained Earnings and increase Cash Dividend Payable. 
D)  decrease Cash Dividend Payable and increase Retained Earnings. 
A)  increase Cash and increase Cash Dividend Payable. 
B)  decrease Cash Dividend Payable and decrease Cash. 
C)  decrease Retained Earnings and increase Cash Dividend Payable. 
D)  decrease Cash Dividend Payable and increase Retained Earnings.

Question 19

Book value is a measure of the market value of the stock.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  $130,000 
B)  $98,000 
C)  $860,000 
D)  $114,000 
A)  $130,000 
B)  $98,000 
C)  $860,000 
D)  $114,000

The statement of stockholders' equity

The amount received for each share of stock in excess of par value is ______________________.

Select the statement on which each of the items provided below would be reported. -Dividends for the period.

Authorized stock represents the

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Which of the following is true concerning a sole proprietorship?

Tropical Co.declared a cash dividend of $30,000.The entry includes a(n)

[APPENDIX] A partnership can be owned by one or more entities or individuals.

The Treasury Stock account should be considered an asset account.

Which of the following statements regarding partnerships is true?

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information, how many shares are outstanding at December 31?

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which item would not be recorded until declared?

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

The participating feature of stock allows stockholders to sell stock back to the company.

Which of the following is reported as a financing activity?

When the owner of a sole proprietorship withdraws assets from the business for personal use

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Book value is a measure of the market value of the stock.

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

The statement of stockholders' equity

The amount received for each share of stock in excess of par value is ______________________.

Select the statement on which each of the items provided below would be reported. -Dividends for the period.

Authorized stock represents the

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Which of the following is true concerning a sole proprietorship?

Tropical Co.declared a cash dividend of $30,000.The entry includes a(n)

[APPENDIX] A partnership can be owned by one or more entities or individuals.

The Treasury Stock account should be considered an asset account.

Which of the following statements regarding partnerships is true?

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information, how many shares are outstanding at December 31?

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which item would not be recorded until declared?

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

The participating feature of stock allows stockholders to sell stock back to the company.

Which of the following is reported as a financing activity?

When the owner of a sole proprietorship withdraws assets from the business for personal use

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Book value is a measure of the market value of the stock.

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