Question 1

The portion of Stockholders' Equity that can be used for dividends is referred to as legal capital.

Accepted Answer

A) True 
 B)False  False

Question 2

A stock dividend may be given to reduce the market price of the stock.

Accepted Answer

A) True 
 B)False  True

Question 3

If a company has 3,000 shares authorized and 2,000 have been issued, the annual dividends on $18 par 3% preferred stock is $1,620.

Accepted Answer

A) True 
 B)False  False

Question 4

Treasury stock transactions are uncommon among larger corporations.

Accepted Answer

A) True 
 B)False

Question 5

If you own 700 shares (2% of a corporation's stock)and the corporation issues 19,000 new shares, how many of the new shares can you purchase under preemptive right?

Accepted Answer

A) 686 
B) 380 
C) 1,080 
D)  0 
A) 686 
B) 380 
C) 1,080 
D)  0

Question 6

Which of the following would cause the decrease of the par value of a company's stock?

Accepted Answer

A) Cash dividend 
B) Stock split 
C) Stock dividend 
D) Sale of additional stock 
A) Cash dividend 
B) Stock split 
C) Stock dividend 
D) Sale of additional stock

Question 7

Vintage Boutique's outstanding stock is 90 shares of $110 par, 11% cumulative preferred stock and 2,500 shares of $14 par common stock. Vintage Boutique paid $1,600 in cash dividends during the year. No dividends are in arrears. Common stockholders received:

Accepted Answer

A) $0. 
B) $511. 
C) $1,600. 
D) $1,089. 
A) $0. 
B) $511. 
C) $1,600. 
D) $1,089.

Question 8

For most companies, preemptive rights are the exception, rather than the rule.

Accepted Answer

A) True 
 B)False

Question 9

Values such as par, stated value, and no-par are assigned based upon:

Accepted Answer

A) federal regulation. 
B) choice of the organizers of the corporation. 
C) tax law. 
D) market values of the stock. 
A) federal regulation. 
B) choice of the organizers of the corporation. 
C) tax law. 
D) market values of the stock.

Question 10

Stockholders will be issued ________ physically or electronically.

Accepted Answer

A) charters 
B) articles of incorporation 
C) authorized stock 
D) stock certificates 
A) charters 
B) articles of incorporation 
C) authorized stock 
D) stock certificates

Question 11

A stock dividend will increase total assets.

Accepted Answer

A) True 
 B)False

Question 12

Cypress Corporation's outstanding stock is 75 shares of $55-par, 7% non-cumulative preferred stock and 2,100 shares of $12-par common stock. Cypress paid $2,500 in dividends during the year. Common stockholders received:

Accepted Answer

A) $2,500. 
B) $2,211. 
C) $289. 
D) $0. 
A) $2,500. 
B) $2,211. 
C) $289. 
D) $0.

Question 13

At least one "class" of stock MUST have:

Accepted Answer

A) preemptive rights. 
B) dividend rights. 
C) liquidation rights. 
D) voting rights. 
A) preemptive rights. 
B) dividend rights. 
C) liquidation rights. 
D) voting rights.

Question 14

Preferred stock may have its dividend rate listed as a percentage of par value per share or as a flat stated amount.

Accepted Answer

A) True 
 B)False

Question 15

The Wellington Winery's Stockholders' Equity section includes the following information:  
What was the total selling price of the common stock?

Accepted Answer

A) $16,000 
B) $22,000 
C) $24,000 
D) $33,000 
A) $16,000 
B) $22,000 
C) $24,000 
D) $33,000

Question 16

A stock dividend affects total Stockholders' Equity.

Accepted Answer

A) True 
 B)False

Question 17

The formula to determine dividends on par-value preferred stock is:

Accepted Answer

A) number of outstanding shares times dividend rate. 
B) dividend rate times par value. 
C) par value times number of outstanding shares times dividend rate. 
D) number of outstanding shares divided by the dividend rate. 
A) number of outstanding shares times dividend rate. 
B) dividend rate times par value. 
C) par value times number of outstanding shares times dividend rate. 
D) number of outstanding shares divided by the dividend rate.

Question 18

Authorized capital stock are those shares:

Accepted Answer

A) listed in the charter. 
B) issued to the corporation's officers. 
C) sold and in stockholder possession. 
D) that pay dividends. 
A) listed in the charter. 
B) issued to the corporation's officers. 
C) sold and in stockholder possession. 
D) that pay dividends.

Question 19

HiTech Industries has 15,000 shares of treasury cost which it purchased for $63/share. It later resold 3,300 of those shares for $82/share. The amount to be credited to Paid-in Capital-Treasury Stock is:

Accepted Answer

A) $270,600. 
B) $62,700. 
C) $222,300. 
D) $207,900. 
A) $270,600. 
B) $62,700. 
C) $222,300. 
D) $207,900.

Question 20

What are dividends in arrears?

Accepted Answer

A) The portion of Stockholders' Equity that cannot be used to pay dividends 
B) A distribution of a corporation's own stock to its shareholders 
C) The portion of an annual dividend on cumulative preferred stock which has not been paid 
D) An increase in the number of outstanding shares of stock 
A) The portion of Stockholders' Equity that cannot be used to pay dividends 
B) A distribution of a corporation's own stock to its shareholders 
C) The portion of an annual dividend on cumulative preferred stock which has not been paid 
D) An increase in the number of outstanding shares of stock

The portion of Stockholders' Equity that can be used for dividends is referred to as legal capital.

A stock dividend may be given to reduce the market price of the stock.

If a company has 3,000 shares authorized and 2,000 have been issued, the annual dividends on $18 par 3% preferred stock is $1,620.

Treasury stock transactions are uncommon among larger corporations.

If you own 700 shares (2% of a corporation's stock)and the corporation issues 19,000 new shares, how many of the new shares can you purchase under preemptive right?

Which of the following would cause the decrease of the par value of a company's stock?

Vintage Boutique's outstanding stock is 90 shares of $110 par, 11% cumulative preferred stock and 2,500 shares of $14 par common stock. Vintage Boutique paid $1,600 in cash dividends during the year. No dividends are in arrears. Common stockholders received:

For most companies, preemptive rights are the exception, rather than the rule.

Values such as par, stated value, and no-par are assigned based upon:

Stockholders will be issued ________ physically or electronically.

A stock dividend will increase total assets.

Cypress Corporation's outstanding stock is 75 shares of $55-par, 7% non-cumulative preferred stock and 2,100 shares of $12-par common stock. Cypress paid $2,500 in dividends during the year. Common stockholders received:

At least one "class" of stock MUST have:

Preferred stock may have its dividend rate listed as a percentage of par value per share or as a flat stated amount.

The Wellington Winery's Stockholders' Equity section includes the following information: What was the total selling price of the common stock?

A stock dividend affects total Stockholders' Equity.

The formula to determine dividends on par-value preferred stock is:

Authorized capital stock are those shares:

HiTech Industries has 15,000 shares of treasury cost which it purchased for $63/share. It later resold 3,300 of those shares for $82/share. The amount to be credited to Paid-in Capital-Treasury Stock is:

What are dividends in arrears?

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

The Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Corporations: Paid-In Capital and Retained Earnings

The portion of Stockholders' Equity that can be used for dividends is referred to as legal capital.

A stock dividend may be given to reduce the market price of the stock.

If a company has 3,000 shares authorized and 2,000 have been issued, the annual dividends on $18 par 3% preferred stock is $1,620.

Treasury stock transactions are uncommon among larger corporations.

If you own 700 shares (2% of a corporation's stock)and the corporation issues 19,000 new shares, how many of the new shares can you purchase under preemptive right?

Which of the following would cause the decrease of the par value of a company's stock?

Vintage Boutique's outstanding stock is 90 shares of $110 par, 11% cumulative preferred stock and 2,500 shares of $14 par common stock. Vintage Boutique paid $1,600 in cash dividends during the year. No dividends are in arrears. Common stockholders received:

For most companies, preemptive rights are the exception, rather than the rule.

Values such as par, stated value, and no-par are assigned based upon:

Stockholders will be issued ________ physically or electronically.

A stock dividend will increase total assets.

Cypress Corporation's outstanding stock is 75 shares of $55-par, 7% non-cumulative preferred stock and 2,100 shares of $12-par common stock. Cypress paid $2,500 in dividends during the year. Common stockholders received:

At least one "class" of stock MUST have:

Preferred stock may have its dividend rate listed as a percentage of par value per share or as a flat stated amount.

The Wellington Winery's Stockholders' Equity section includes the following information: What was the total selling price of the common stock?

A stock dividend affects total Stockholders' Equity.

The formula to determine dividends on par-value preferred stock is:

Authorized capital stock are those shares:

HiTech Industries has 15,000 shares of treasury cost which it purchased for $63/share. It later resold 3,300 of those shares for $82/share. The amount to be credited to Paid-in Capital-Treasury Stock is:

What are dividends in arrears?

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Current Liabilities and Long-Term Debt

The Statement of Cash Flows

Financial Statement Analysis

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