Question 1

The statement of stockholders' equity is useful in evaluating a company's liquidity.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements is true with regard to contributed capital?

Accepted Answer

A)  Preferred stock is stock that has been retired. 
B)  It is very unlikely corporations may have more than one class of stock outstanding. 
C)  The outstanding number of shares is the maximum number of shares that can be issued by a corporation. 
D)  The shares that are in the hands of the stockholders are said to be outstanding. 
A)  Preferred stock is stock that has been retired. 
B)  It is very unlikely corporations may have more than one class of stock outstanding. 
C)  The outstanding number of shares is the maximum number of shares that can be issued by a corporation. 
D)  The shares that are in the hands of the stockholders are said to be outstanding.

Question 3

If a company issues $5 par value common stock,

Accepted Answer

A)  $5 per share is presented in the common stock account on the balance sheet. 
B)  the minimum selling price is $5. 
C)  the shareholders will receive $5 in dividends. 
D)  liabilities are increased as a result of the transaction. 
A)  $5 per share is presented in the common stock account on the balance sheet. 
B)  the minimum selling price is $5. 
C)  the shareholders will receive $5 in dividends. 
D)  liabilities are increased as a result of the transaction.

Question 4

Watson Company has 5,000 shares of $5 par, 3% preferred stock outstanding, and 25,000 shares of $2 par common stock outstanding.The preferred stock is cumulative and no dividends have been paid for the past two years.If the company wishes to distribute $2 per share to the common stockholders, what is the total amount of dividends that must be paid in the current year?

Accepted Answer

A)  $2,250 
B)  $50,000 
C)  $50,750 
D)  $52,250 
A)  $2,250 
B)  $50,000 
C)  $50,750 
D)  $52,250

Question 5

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity.
-Which type of stock decreases stockholders' equity?

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 6

Debbie and Alex formed a new partnership.The partnership agreement specified that income should be allocated in a 2-to-1 ratio, with Debbie receiving the larger portion.If revenue for the first year was $90,000 and expenses were $60,000, how much would be allocated to each partner? a. Debbie- $\$ 45,000$; Alex- $\$ 45,000$
b. Debbie- $\$ 20,000 ;$ Alex- $\$ 10,000$
c. Debbie- $\$ 60,000 ;$ Alex- $\$ 30,000$
d. Debbie- $\$ 40,000 ;$ Alex- $\$ 20,000$

Accepted Answer

The answer of Debbie and Alex formed a new partnership.The...

Question 7

The maximum number of shares a company may issue are ______________________________.

Accepted Answer

The answer of The maximum number of shares a company...

Question 8

All of the following are reasons for a company to repurchase its previously issued stock, except:

Accepted Answer

A)  to support the market price of the stock 
B)  to resell to employees 
C)  to increase the shares outstanding 
D)  for bonuses to employees 
A)  to support the market price of the stock 
B)  to resell to employees 
C)  to increase the shares outstanding 
D)  for bonuses to employees

Question 9

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity.
-Which item results in no change to stockholders' equity?

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 10

Select the letter of the term each statement best describes.
-When the stock of a corporation is repurchased with no intention to reissue at a later date.

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 11

Select the letter of the term each statement best describes.
-Allows the issuing firm to eliminate a class of stock by paying the stockholders a fixed amount.

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 12

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).
-Repurchase of common stock as treasury stock

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 13

Poole Company began business on January 1, 2016.The corporate charter authorized issuance of 5,000 shares of $1 par value common stock, and 4,000 shares of $8 par value, 6% cumulative preferred stock.None of the preferred shares were issued.On July 1, Poole issued 1,000 shares of common stock in exchange for two years rent on a retail location.The cash rental price is $2,400 per month and the rental period begins on July 1.The correct entry to record the July 1 transaction will

Accepted Answer

A)  Increase Cash, $57,600; Decrease Prepaid Rent, $57,600 
B)  Increase Prepaid Rent, $57,600; Increase Common Stock, $57,600 
C)  Increase Prepaid Rent, $57,600; Increase Common Stock, $1,000; Increase Additional Paid-in Capital-Common, $56,600 
D)  Increase Prepaid Rent, $57,600; Increase Common Stock, $5,000; Increase Additional Paid-in Capital-Common, $52,600 
A)  Increase Cash, $57,600; Decrease Prepaid Rent, $57,600 
B)  Increase Prepaid Rent, $57,600; Increase Common Stock, $57,600 
C)  Increase Prepaid Rent, $57,600; Increase Common Stock, $1,000; Increase Additional Paid-in Capital-Common, $56,600 
D)  Increase Prepaid Rent, $57,600; Increase Common Stock, $5,000; Increase Additional Paid-in Capital-Common, $52,600

Question 14

Which of the following transactions has an effect on the statement of cash flows?

Accepted Answer

A)  The sale of preferred stock 
B)  The declaration of a cash dividend 
C)  A small stock dividend 
D)  A large stock dividend 
A)  The sale of preferred stock 
B)  The declaration of a cash dividend 
C)  A small stock dividend 
D)  A large stock dividend

Question 15

Match the terms to the definitions by selecting the letter of the term.Each term may be used more than once or not at all.
-The amount received for the issuance of stock in excess of par value.

Accepted Answer

A) cumulative feature 
B) stock dividend 
C) retired stock 
D) retained earnings 
E) callable feature
F)convertible feature
G)outstanding shares
H)treasury stock
I)participating feature
J)additional paid-in capital 
A) cumulative feature 
B) stock dividend 
C) retired stock 
D) retained earnings 
E) callable feature
F)convertible feature
G)outstanding shares
H)treasury stock
I)participating feature
J)additional paid-in capital

Question 16

Select the letter of the term each statement best describes.
-Stock issued by the firm then repurchased but not retired.

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 17

Dividends in Arrears

Accepted Answer

A)  is a liability account. 
B)  appear in the notes to the financial statements. 
C)  is a stockholders' equity account. 
D)  is a contra-stockholders' equity account. 
A)  is a liability account. 
B)  appear in the notes to the financial statements. 
C)  is a stockholders' equity account. 
D)  is a contra-stockholders' equity account.

Question 18

On January 1, 2016, Bogart Acres Company issued 10,000 shares of 10%, $20 par value cumulative preferred stock.In 2016 and 2017, no dividends were declared on preferred stock.In 2018, Bogart had a profitable year and decided to pay dividends to stockholders of both preferred and common stock.If it has $200,000 available for dividends in 2018, how much could it pay to the common stockholders?

Accepted Answer

A)  $140,000 
B)  $160,000 
C)  $180,000 
D)  $200,000 
A)  $140,000 
B)  $160,000 
C)  $180,000 
D)  $200,000

Question 19

An arbitrary amount that is stated on the face of the stock certificate is ____________________.

Accepted Answer

The answer of An arbitrary amount that is stated on...

Question 20

Vegan Company reported the following: Common stock, $5 par, 200,000 shares authorized, 50,000 shares issued and outstanding
What is the effect of issuing 2,000 shares of common stock in exchange for land with valued by a realtor at $36,000 if the common stock sells for $12 per share and is regularly traded?

Accepted Answer

A)  The Land account increases by $24,000. 
B)  Retained Earnings decreases by $10,000. 
C)  Common Stock increases by $36,000. 
D)  Additional Paid-in Capital - Common increases by $24,000. 
A)  The Land account increases by $24,000. 
B)  Retained Earnings decreases by $10,000. 
C)  Common Stock increases by $36,000. 
D)  Additional Paid-in Capital - Common increases by $24,000.

The statement of stockholders' equity is useful in evaluating a company's liquidity.

Which of the following statements is true with regard to contributed capital?

If a company issues $5 par value common stock,

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which type of stock decreases stockholders' equity?

The maximum number of shares a company may issue are ______________________________.

All of the following are reasons for a company to repurchase its previously issued stock, except:

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which item results in no change to stockholders' equity?

Select the letter of the term each statement best describes. -When the stock of a corporation is repurchased with no intention to reissue at a later date.

Select the letter of the term each statement best describes. -Allows the issuing firm to eliminate a class of stock by paying the stockholders a fixed 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). -Repurchase of common stock as treasury stock

Which of the following transactions has an effect on the statement of cash flows?

Match the terms to the definitions by selecting the letter of the term.Each term may be used more than once or not at all. -The amount received for the issuance of stock in excess of par value.

Select the letter of the term each statement best describes. -Stock issued by the firm then repurchased but not retired.

Dividends in Arrears

An arbitrary amount that is stated on the face of the stock certificate is ____________________.

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

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Exam 11: Stockholders Equity

The statement of stockholders' equity is useful in evaluating a company's liquidity.

Which of the following statements is true with regard to contributed capital?

If a company issues $5 par value common stock,

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which type of stock decreases stockholders' equity?

The maximum number of shares a company may issue are ______________________________.

All of the following are reasons for a company to repurchase its previously issued stock, except:

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which item results in no change to stockholders' equity?

Select the letter of the term each statement best describes. -When the stock of a corporation is repurchased with no intention to reissue at a later date.

Select the letter of the term each statement best describes. -Allows the issuing firm to eliminate a class of stock by paying the stockholders a fixed 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). -Repurchase of common stock as treasury stock

Which of the following transactions has an effect on the statement of cash flows?

Match the terms to the definitions by selecting the letter of the term.Each term may be used more than once or not at all. -The amount received for the issuance of stock in excess of par value.

Select the letter of the term each statement best describes. -Stock issued by the firm then repurchased but not retired.

Dividends in Arrears

An arbitrary amount that is stated on the face of the stock certificate is ____________________.

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