Question 1

A corporation must incorporate in every state in which it does business.

Accepted Answer

A) True 
 B)False

Question 2

Cellars, Inc. Stockholders' Equity section includes the following information:  
Total paid-in capital is:

Accepted Answer

A) $76,000. 
B) $121,500. 
C) $114,000. 
D) $38,000. 
A) $76,000. 
B) $121,500. 
C) $114,000. 
D) $38,000.

Question 3

Which of the following business types is largest by number?

Accepted Answer

A) Not-for-profits 
B) Proprietorships and partnerships 
C) Corporations 
D) Government entities 
A) Not-for-profits 
B) Proprietorships and partnerships 
C) Corporations 
D) Government entities

Question 4

If there is only one class of stock outstanding, such stock would be classified as:

Accepted Answer

A) authorized stock. 
B) common stock. 
C) preferred stock. 
D) issued stock. 
A) authorized stock. 
B) common stock. 
C) preferred stock. 
D) issued stock.

Question 5

Stonework Company's outstanding stock is 80 shares of $80, 4% cumulative preferred stock and 2,000 shares of $12 par common stock. Stonework paid $2,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received:

Accepted Answer

A) $1,744. 
B) $1,488. 
C) $960. 
D) $0. 
A) $1,744. 
B) $1,488. 
C) $960. 
D) $0.

Question 6

Which of the following is TRUE regarding treasury stock?

Accepted Answer

A) Treasury Stock has a debit balance. 
B) Treasury Stock is a contra-asset account. 
C) Treasury Stock is recorded at cost. 
D) Both A and C are true of Treasury Stock. 
A) Treasury Stock has a debit balance. 
B) Treasury Stock is a contra-asset account. 
C) Treasury Stock is recorded at cost. 
D) Both A and C are true of Treasury Stock.

Question 7

Salty's Seafood has 2,000 shares of $12 par common stock outstanding. During the current year, the company distributed a 10% stock dividend. The market value of the stock at that time was $19/share. After the distribution, Salty's total Stockholders' Equity should increase or decrease by:

Accepted Answer

A) ($3,800). 
B) $2,400. 
C) $1,400. 
D)  $0. 
A) ($3,800). 
B) $2,400. 
C) $1,400. 
D)  $0.

Question 8

The liability "dividend payable" is recognized on the date of:

Accepted Answer

A) stock issue. 
B) payment. 
C) record. 
D) declaration. 
A) stock issue. 
B) payment. 
C) record. 
D) declaration.

Question 9

Taylor Fish Farm's Stockholders' Equity section includes the following information:  
What was the total selling price of the common stock?

Accepted Answer

A) $13,000 
B) $19,000 
C) $17,500 
D) $23,500 
A) $13,000 
B) $19,000 
C) $17,500 
D) $23,500

Question 10

When a company issues stock dividends:

Accepted Answer

A) liabilities are increased. 
B) common stock is decreased. 
C) retained earnings are decreased. 
D) dividends are decreased. 
A) liabilities are increased. 
B) common stock is decreased. 
C) retained earnings are decreased. 
D) dividends are decreased.

Question 11

If shares of preferred stock are sold at par value for cash, the transaction would be entered by:

Accepted Answer

A) debiting Cash and crediting Preferred Stock. 
B) debiting Preferred Stock and crediting Cash. 
C) debiting Cash and crediting Paid-in Capital in Excess of Par. 
D) debiting Paid-In Capital in Excess of Par and crediting Preferred Stock. 
A) debiting Cash and crediting Preferred Stock. 
B) debiting Preferred Stock and crediting Cash. 
C) debiting Cash and crediting Paid-in Capital in Excess of Par. 
D) debiting Paid-In Capital in Excess of Par and crediting Preferred Stock.

Question 12

When a company purchases treasury stock, outstanding stock is computed as:

Accepted Answer

A) Issued stock + Treasury stock 
B) Issued stock - Treasury stock 
C) Authorized stock - Treasury stock 
D) Authorized stock + Treasury stock 
A) Issued stock + Treasury stock 
B) Issued stock - Treasury stock 
C) Authorized stock - Treasury stock 
D) Authorized stock + Treasury stock

Question 13

A type of stock that pays dividends in arrears is:

Accepted Answer

A) cumulative common stock. 
B) cumulative preferred stock. 
C) non-cumulative common stock. 
D) non-cumulative preferred stock. 
A) cumulative common stock. 
B) cumulative preferred stock. 
C) non-cumulative common stock. 
D) non-cumulative preferred stock.

Question 14

Before a 4-for-1 stock split, the shares outstanding were 60,000 shares at $80.00 par. After the split, what was the par value and number of shares?

Accepted Answer

A) 240,000 shares and $80.00/share 
B) 15,000 shares and $20.00/share 
C) 15,000 shares and $80.00/share 
D) 240,000 shares and $20.00/share 
A) 240,000 shares and $80.00/share 
B) 15,000 shares and $20.00/share 
C) 15,000 shares and $80.00/share 
D) 240,000 shares and $20.00/share

Question 15

The initial selling price for a share of stock is called the:

Accepted Answer

A) stated value 
B) par value 
C) issue price 
D) list price 
A) stated value 
B) par value 
C) issue price 
D) list price

Question 16

If a company has 2,500 shares authorized and 1,500 have been issued, the annual dividends on $20 par 5% preferred stock is $1,500.

Accepted Answer

A) True 
 B)False

Question 17

Treasury stock is recorded at par value.

Accepted Answer

A) True 
 B)False

Question 18

A corporation is a separate legal entity from its owners.

Accepted Answer

A) True 
 B)False

Question 19

Stockholders receiving their proportionate share of any assets left after a company goes out of business is an example of which stockholder right?

Accepted Answer

A) Vote 
B) Dividends 
C) Liquidation 
D) Preemption 
A) Vote 
B) Dividends 
C) Liquidation 
D) Preemption

Question 20

Many companies raise capital by issuing stock directly to stockholders or by using an underwriter.

Accepted Answer

A) True 
 B)False

A corporation must incorporate in every state in which it does business.

Cellars, Inc. Stockholders' Equity section includes the following information: Total paid-in capital is:

Which of the following business types is largest by number?

If there is only one class of stock outstanding, such stock would be classified as:

Stonework Company's outstanding stock is 80 shares of $80, 4% cumulative preferred stock and 2,000 shares of $12 par common stock. Stonework paid $2,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received:

Which of the following is TRUE regarding treasury stock?

Salty's Seafood has 2,000 shares of $12 par common stock outstanding. During the current year, the company distributed a 10% stock dividend. The market value of the stock at that time was $19/share. After the distribution, Salty's total Stockholders' Equity should increase or decrease by:

The liability "dividend payable" is recognized on the date of:

Taylor Fish Farm's Stockholders' Equity section includes the following information: What was the total selling price of the common stock?

When a company issues stock dividends:

If shares of preferred stock are sold at par value for cash, the transaction would be entered by:

When a company purchases treasury stock, outstanding stock is computed as:

A type of stock that pays dividends in arrears is:

Before a 4-for-1 stock split, the shares outstanding were 60,000 shares at $80.00 par. After the split, what was the par value and number of shares?

The initial selling price for a share of stock is called the:

If a company has 2,500 shares authorized and 1,500 have been issued, the annual dividends on $20 par 5% preferred stock is $1,500.

Treasury stock is recorded at par value.

A corporation is a separate legal entity from its owners.

Stockholders receiving their proportionate share of any assets left after a company goes out of business is an example of which stockholder right?

Many companies raise capital by issuing stock directly to stockholders or by using an underwriter.

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

Filters

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

A corporation must incorporate in every state in which it does business.

Cellars, Inc. Stockholders' Equity section includes the following information: Total paid-in capital is:

Which of the following business types is largest by number?

If there is only one class of stock outstanding, such stock would be classified as:

Stonework Company's outstanding stock is 80 shares of $80, 4% cumulative preferred stock and 2,000 shares of $12 par common stock. Stonework paid $2,000 in cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received:

Which of the following is TRUE regarding treasury stock?

Salty's Seafood has 2,000 shares of $12 par common stock outstanding. During the current year, the company distributed a 10% stock dividend. The market value of the stock at that time was $19/share. After the distribution, Salty's total Stockholders' Equity should increase or decrease by:

The liability "dividend payable" is recognized on the date of:

Taylor Fish Farm's Stockholders' Equity section includes the following information: What was the total selling price of the common stock?

When a company issues stock dividends:

If shares of preferred stock are sold at par value for cash, the transaction would be entered by:

When a company purchases treasury stock, outstanding stock is computed as:

A type of stock that pays dividends in arrears is:

Before a 4-for-1 stock split, the shares outstanding were 60,000 shares at $80.00 par. After the split, what was the par value and number of shares?

The initial selling price for a share of stock is called the:

If a company has 2,500 shares authorized and 1,500 have been issued, the annual dividends on $20 par 5% preferred stock is $1,500.

Treasury stock is recorded at par value.

A corporation is a separate legal entity from its owners.

Stockholders receiving their proportionate share of any assets left after a company goes out of business is an example of which stockholder right?

Many companies raise capital by issuing stock directly to stockholders or by using an underwriter.

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

Filters