Question 1

Comprehensive income is

Accepted Answer

A)  considered an appropriation of retained earnings when reported in the stockholders' equity section of the balance sheet. 
B)  the result of all events and transactions that affect income during the accounting period that are reported on the income statement. 
C)  reporting all items that are not under management's control on the statement of retained earnings. 
D)  an all-inclusive approach to income that includes transactions that affect stockholders' equity with the exception of those transactions that affect owners. 
A)  considered an appropriation of retained earnings when reported in the stockholders' equity section of the balance sheet. 
B)  the result of all events and transactions that affect income during the accounting period that are reported on the income statement. 
C)  reporting all items that are not under management's control on the statement of retained earnings. 
D)  an all-inclusive approach to income that includes transactions that affect stockholders' equity with the exception of those transactions that affect owners.

Question 2

Under IFRS, an item such as a convertible bond must be separated into two parts, showing one part in the Liability category and the other part in the Stockholders' Equity category.

Accepted Answer

A) True 
 B)False

Question 3

A company would repurchase its own stock for all of the following reasons except

Accepted Answer

A)  it needs the stock for employee bonuses. 
B)  it wishes to make an investment in its own stock. 
C)  it wishes to prevent unwanted takeover attempts. 
D)  it wishes to improve the company's financial ratios. 
A)  it needs the stock for employee bonuses. 
B)  it wishes to make an investment in its own stock. 
C)  it wishes to prevent unwanted takeover attempts. 
D)  it wishes to improve the company's financial ratios.

Question 4

A 15% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  The payment of dividends is at the discretion of the board of directors. 
B)  The payment of interest on bonds payable is required by law. 
C)  Interest accrues, whereas dividends do not accrue. 
D)  The declaration of dividends reduces the amount of income taxes the corporation must pay. 
A)  The payment of dividends is at the discretion of the board of directors. 
B)  The payment of interest on bonds payable is required by law. 
C)  Interest accrues, whereas dividends do not accrue. 
D)  The declaration of dividends reduces the amount of income taxes the corporation must pay.

Question 6

Select the letter of the term each statement best describes.
-The number of shares issued less the number of shares held as treasury 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 7

Tarr, a sole proprietorship, had the following balances and transactions during 2016: beginning capital, $40,000; contribution of cash to the business by the owner, $15,000; revenue, $60,000; expenses, $35,000; withdrawal by the owner, $5,000.What is the amount of the ending capital balance?

Accepted Answer

A)  $40,000 
B)  $60,000 
C)  $75,000 
D)  $85,000 
A)  $40,000 
B)  $60,000 
C)  $75,000 
D)  $85,000

Question 8

The all-inclusive income approach requires that all events and transactions that affect income should be reported on the income statement to help prevent the manipulation of income.

Accepted Answer

A) True 
 B)False

Question 9

Preferred stock receives first preference on voting rights.

Accepted Answer

A) True 
 B)False

Question 10

A _____________________ allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend.

Accepted Answer

participat

Question 11

Winslow Corporation reported the following in the stockholders' equity section of its balance sheet at December 31, 2016: $\begin{array}{lr}
\text { Common stock, } \$ 1 \text { stated value } & \$ 10,000 \
\text { Additional paid-in capital-common } & 40,000 \
\text { Retained earnings } & 25,000 \
\text { Total contributed capital and retained earnings } & \$ 75,000 \
\text { Less: Treasury stock (at cost } \$ 20 \text { per share) } & (2,000) \
\text { Total stockholders' equity } & \$ 73,000
\end{array}$ How many shares of stock are issued?

Accepted Answer

A)  9,000 
B)  10,000 
C)  10,100 
D)  Not enough information to determine. 
A)  9,000 
B)  10,000 
C)  10,100 
D)  Not enough information to determine.

Question 12

When a company wishes to purchase and retire its own stock, the company must

Accepted Answer

A)  decrease the stock account balances by the original issue price. 
B)  record a gain or loss depending on the difference between original selling price and repurchase cost. 
C)  get the approval of the state to do so. 
D)  issue a different class of stock to the former stockholders. 
A)  decrease the stock account balances by the original issue price. 
B)  record a gain or loss depending on the difference between original selling price and repurchase cost. 
C)  get the approval of the state to do so. 
D)  issue a different class of stock to the former stockholders.

Question 13

A ________________ allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

Accepted Answer

The answer of A ________________ allows the firm to eliminate...

Question 14

From the following list, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N).
-Issuance of common stock for equipment

Accepted Answer

A) Operating-O 
B) Investing-I 
C) Financing-F 
D) Not separately reported- $ \mathrm{N} $ 
A) Operating-O 
B) Investing-I 
C) Financing-F 
D) Not separately reported- $ \mathrm{N} $

Question 15

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new, there is no established market price for its stock.How would the company record the transaction?

Accepted Answer

A)  In terms of the par value of the stock issued. 
B)  At the fair market value of the machine. 
C)  At the cost recorded by the previous owner of the machine. 
D)  Recording the transaction would be postponed until a market price for the stock could be determined. 
A)  In terms of the par value of the stock issued. 
B)  At the fair market value of the machine. 
C)  At the cost recorded by the previous owner of the machine. 
D)  Recording the transaction would be postponed until a market price for the stock could be determined.

Question 16

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

Accepted Answer

A) True 
 B)False

Question 17

A company may prepare a statement of retained earnings instead of a statement of stockholders' equity if the only changes in the stockholders' equity accounts that occurred during the year are earnings and dividends.

Accepted Answer

A) True 
 B)False

Question 18

[APPENDIX] A balance sheet of a sole proprietorship includes only the business assets and liabilities, not the personal assets of the owner.

Accepted Answer

A) True 
 B)False

Question 19

[APPENDIX] A sole proprietorship is a separate entity for legal purposes.

Accepted Answer

A) True 
 B)False

Question 20

FASB's concept of comprehensive income

Accepted Answer

A)  excludes transactions that involve the payment of dividends. 
B)  requires that all transactions must be shown on the income statement. 
C)  has a primary drawback because it allows management to manipulate the income figure to a certain extent. 
D)  allows items that are not necessarily under management's control, such as natural disasters, to be shown as an adjustment of retained earnings. 
A)  excludes transactions that involve the payment of dividends. 
B)  requires that all transactions must be shown on the income statement. 
C)  has a primary drawback because it allows management to manipulate the income figure to a certain extent. 
D)  allows items that are not necessarily under management's control, such as natural disasters, to be shown as an adjustment of retained earnings.

Comprehensive income is

Under IFRS, an item such as a convertible bond must be separated into two parts, showing one part in the Liability category and the other part in the Stockholders' Equity category.

A company would repurchase its own stock for all of the following reasons except

A 15% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

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

Select the letter of the term each statement best describes. -The number of shares issued less the number of shares held as treasury stock.

Tarr, a sole proprietorship, had the following balances and transactions during 2016: beginning capital, $40,000; contribution of cash to the business by the owner, $15,000; revenue, $60,000; expenses, $35,000; withdrawal by the owner, $5,000.What is the amount of the ending capital balance?

The all-inclusive income approach requires that all events and transactions that affect income should be reported on the income statement to help prevent the manipulation of income.

Preferred stock receives first preference on voting rights.

A _____________________ allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend.

When a company wishes to purchase and retire its own stock, the company must

A ________________ allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

From the following list, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N). -Issuance of common stock for equipment

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new, there is no established market price for its stock.How would the company record the transaction?

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

A company may prepare a statement of retained earnings instead of a statement of stockholders' equity if the only changes in the stockholders' equity accounts that occurred during the year are earnings and dividends.

[APPENDIX] A balance sheet of a sole proprietorship includes only the business assets and liabilities, not the personal assets of the owner.

[APPENDIX] A sole proprietorship is a separate entity for legal purposes.

FASB's concept of comprehensive income

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

Comprehensive income is

Under IFRS, an item such as a convertible bond must be separated into two parts, showing one part in the Liability category and the other part in the Stockholders' Equity category.

A company would repurchase its own stock for all of the following reasons except

A 15% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

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

Select the letter of the term each statement best describes. -The number of shares issued less the number of shares held as treasury stock.

Tarr, a sole proprietorship, had the following balances and transactions during 2016: beginning capital, $40,000; contribution of cash to the business by the owner, $15,000; revenue, $60,000; expenses, $35,000; withdrawal by the owner, $5,000.What is the amount of the ending capital balance?

The all-inclusive income approach requires that all events and transactions that affect income should be reported on the income statement to help prevent the manipulation of income.

Preferred stock receives first preference on voting rights.

A _____________________ allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend.

When a company wishes to purchase and retire its own stock, the company must

A ________________ allows the firm to eliminate a class of stock by paying the stockholders a specified amount.

From the following list, identify each item as operating (O), investing (I), financing (F), or not separately reported on the statement of cash flows (N). -Issuance of common stock for equipment

A company purchased machinery by issuing 2,000 shares of $3 par value common stock.Since the company is new, there is no established market price for its stock.How would the company record the transaction?

A stock split is similar to a stock dividend in that it results in additional shares of stock outstanding and is nontaxable.

A company may prepare a statement of retained earnings instead of a statement of stockholders' equity if the only changes in the stockholders' equity accounts that occurred during the year are earnings and dividends.

[APPENDIX] A balance sheet of a sole proprietorship includes only the business assets and liabilities, not the personal assets of the owner.

[APPENDIX] A sole proprietorship is a separate entity for legal purposes.

FASB's concept of comprehensive income

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