Question 1

All of the following features are common to preferred stock except:

Accepted Answer

A) Right to vote 
B) Right to dividends 
C) Cumulative 
D) Convertible 
A) Right to vote 
B) Right to dividends 
C) Cumulative 
D) Convertible

Question 2

If a firm has only one class of stock,the stock is called:

Accepted Answer

A) callable stock 
B) common stock 
C) preferred stock 
D) convertible stock 
A) callable stock 
B) common stock 
C) preferred stock 
D) convertible stock

Question 3

A corporation's repurchased stock intended for reissuance at a later date is called:

Accepted Answer

A) callable stock 
B) treasury stock 
C) convertible stock 
D) redeemable stock 
A) callable stock 
B) treasury stock 
C) convertible stock 
D) redeemable stock

Question 4

Marisa,Andrew and David are partners in the MAD Company.Their average capital balances for the current year were $48,000,$63,000 and $54,000,respectively.Their partnership income sharing agreement includes the following provisions: (1)A salary allowance of $25,000 for Marisa and $20,000 for David,(2)a 10% return on average capital for all partners,and (3)any remainder divided equally.Determine the increase or decrease in each of the partners' capital accounts assuming (
A)net income is $66,000 and (b)net loss is $4,500.

Accepted Answer

The answer of Marisa,Andrew and David are partners in the...

Question 5

If preferred stockholders have the right to sell their stock for cash to the corporation it is referred to as

Accepted Answer

A) callable 
B) convertible 
C) redeemable 
D) participating 
A) callable 
B) convertible 
C) redeemable 
D) participating

Question 6

Match between columns
                        Premises: Preferred stock that allows unpaid dividend to accumulate.
The basic ownership unit of a corporation.
An ownership interest that gives the stockholder preferences as to dividends and liquidation.
The corporation own issued stock that it has repurchased in the secondary market.
Preferred stock that gives the issuing corporation the right to buy the stock back from the stockholders at a predetermined price.
Shares repurchased by the corporation that it will never reissue.
Stock that does not have a minimum price assigned to each share of stock.
Preferred stock that gives its owner the right to exchange the stock for cash.
Preferred stock that allows its holder to receive dividends in excess of the stated dividend rate.
Preferred stock that gives the holder of the shares the right to exchange the stock for other forms of capital (typically common stock).

Accepted Answer

The Answer of Retired stock and Redeemable preferred stock and is...

Question 7

On which of the following dates is no accounting entry made?

Accepted Answer

A) Date of payment 
B) Date of record 
C) Date of declaration 
D) Entries are made on all three dates 
A) Date of payment 
B) Date of record 
C) Date of declaration 
D) Entries are made on all three dates

Question 8

If preferred stock has the right to receive dividends in excess of its stated dividend rate it is referred to as

Accepted Answer

A) callable 
B) convertible 
C) redeemable 
D) participating 
A) callable 
B) convertible 
C) redeemable 
D) participating

Question 9

In which of the following scenarios would financial leverage be maximized?

Accepted Answer

A) High times interest earned ratio and low debt to equity ratio 
B) Low times interest earned ratio and low debt to equity ratio 
C) Low times interest earned ratio and high debt to equity ratio 
D) High times interest earned ratio and a high debt to equity ratio 
A) High times interest earned ratio and low debt to equity ratio 
B) Low times interest earned ratio and low debt to equity ratio 
C) Low times interest earned ratio and high debt to equity ratio 
D) High times interest earned ratio and a high debt to equity ratio

Question 10

Starfury Corporation has 1,000,000,$1 par shares of common stock authorized.A total of 400,000 shares have been sold to stockholders and 10,000 shares have been repurchased by the firm.How many shares are outstanding?

Accepted Answer

A) 1,000,000 
B) 600,000 
C) 400,000 
D) 390,000 
A) 1,000,000 
B) 600,000 
C) 400,000 
D) 390,000

Question 11

If a board of directors decides to pay a dividend,the date on which they make their decision is known as the:

Accepted Answer

A) date of record 
B) date of payment 
C) ex-dividend date 
D) date of declaration 
A) date of record 
B) date of payment 
C) ex-dividend date 
D) date of declaration

Question 12

Which of the following is not a source of financing for a firm?

Accepted Answer

A) Selling asset of the firm. 
B) Issuing stock for cash 
C) Issuing a note to borrow cash 
D) Net income 
A) Selling asset of the firm. 
B) Issuing stock for cash 
C) Issuing a note to borrow cash 
D) Net income

Question 13

During the current year,Lisa,Tony,and Brian,who are partners in the Corsetti Company,had average capital balances of $41,000,$53,000,and $48,000,respectively.The partners share profits and losses by allowing a $16,000 salary to Lisa and a $14,000 salary to Brian,and a 12% return on average capital balances to all the partners.Any remaining income or loss is divided equally.If the company's income was $101,040,Brian's capital account would increase by:

Accepted Answer

A) $13,920 
B) $33,680 
C) $37,760 
D) $53,440 
A) $13,920 
B) $33,680 
C) $37,760 
D) $53,440

Question 14

If you own convertible preferred stock,what right does the convertibility feature give you?

Accepted Answer

A) You can convert the stock into cash whenever you want 
B) You can convert the stock into the firm's common shares 
C) You can convert the stock into cash but only at pre-specified times 
D) You have the right to receive dividends in arrears before common stock gets a dividend 
A) You can convert the stock into cash whenever you want 
B) You can convert the stock into the firm's common shares 
C) You can convert the stock into cash but only at pre-specified times 
D) You have the right to receive dividends in arrears before common stock gets a dividend

Question 15

Michael,Zoe and Perry are partners in the Andover Company.Their partnership income sharing agreement provides that Michael and Zoe are to receive salary allowances of $15,000 and $18,000,respectively,and that any remaining income or loss is to be divided equally among all partners.If the company had a loss of $30,000,Zoe's capital account would:

Accepted Answer

A) increase by $18,000 
B) increase by $8,000 
C) decrease by $10,000 
D) decrease by $3,000 
A) increase by $18,000 
B) increase by $8,000 
C) decrease by $10,000 
D) decrease by $3,000

Question 16

The number of shares of stock a corporation has sold to its stockholders is referred to as the number of shares:

Accepted Answer

A) issued 
B) callable 
C) authorized 
D) outstanding 
A) issued 
B) callable 
C) authorized 
D) outstanding

Question 17

Does the term "preferred" mean that preferred stock is a better investment than common stock?

Accepted Answer

No; the term preferred merely means that

Question 18

Match between columns
                        Premises: Partners are responsible for their own wrongful acts but not the wrongful acts of other partners.
Created as part of the Internal Revenue Code
Business Income taxed only once.
Can have no more 75 members
Limited partners can not manage the business
All owners have full ownership rights and number of owners is not limited.

Accepted Answer

The Answer of Limited Liability Company and Limited Liability Partnership is...

Question 19

Match between columns
                        Premises: A financing strategy that uses debt to increase the rate of return on owners' investment.
A measure of a firm's ability to service its debt.
The total number of shares the state will allow a corporation to sell.
The portion of stockholders' equity required by the state to be retained for the protection of the corporation's creditors.
An arbitrary value assigned to shares of capital stock that is approved by the state in which the business is incorporated.
The chance that a company will fail because it defaults on its debt.
A means of raising cash or other assets in exchange for an ownership interest in a company.
The number of shares sold to stockholders.
A right of common stockholders that allows them to maintain their percentage ownership interest in the corporation when new shares of stock are issued.
When a firm obtains funds (cash) in exchange for a liability to repay the borrowed funds.
A measure of the performance of the owners' investment.
The number of shares held outside the corporation.

Accepted Answer

The Answer of Financial risk and Equity financing and Legal is...

Question 20

When a company borrows more money how are the debt to equity and return on equity affected assuming income before interest and taxes remain the same? Debt to Equity Return on Equity

Accepted Answer

A) Increases Increases 
B) Decreases Decreases 
C) Decreases Increases 
D) Increases Decreases 
A) Increases Increases 
B) Decreases Decreases 
C) Decreases Increases 
D) Increases Decreases

All of the following features are common to preferred stock except:

If a firm has only one class of stock,the stock is called:

A corporation's repurchased stock intended for reissuance at a later date is called:

If preferred stockholders have the right to sell their stock for cash to the corporation it is referred to as

On which of the following dates is no accounting entry made?

If preferred stock has the right to receive dividends in excess of its stated dividend rate it is referred to as

In which of the following scenarios would financial leverage be maximized?

Starfury Corporation has 1,000,000,$1 par shares of common stock authorized.A total of 400,000 shares have been sold to stockholders and 10,000 shares have been repurchased by the firm.How many shares are outstanding?

If a board of directors decides to pay a dividend,the date on which they make their decision is known as the:

Which of the following is not a source of financing for a firm?

If you own convertible preferred stock,what right does the convertibility feature give you?

The number of shares of stock a corporation has sold to its stockholders is referred to as the number of shares:

Does the term "preferred" mean that preferred stock is a better investment than common stock?

When a company borrows more money how are the debt to equity and return on equity affected assuming income before interest and taxes remain the same? Debt to Equity Return on Equity

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters

Exam 13: Planning Equity Financing

All of the following features are common to preferred stock except:

If a firm has only one class of stock,the stock is called:

A corporation's repurchased stock intended for reissuance at a later date is called:

If preferred stockholders have the right to sell their stock for cash to the corporation it is referred to as

On which of the following dates is no accounting entry made?

If preferred stock has the right to receive dividends in excess of its stated dividend rate it is referred to as

In which of the following scenarios would financial leverage be maximized?

Starfury Corporation has 1,000,000,$1 par shares of common stock authorized.A total of 400,000 shares have been sold to stockholders and 10,000 shares have been repurchased by the firm.How many shares are outstanding?

If a board of directors decides to pay a dividend,the date on which they make their decision is known as the:

Which of the following is not a source of financing for a firm?

If you own convertible preferred stock,what right does the convertibility feature give you?

The number of shares of stock a corporation has sold to its stockholders is referred to as the number of shares:

Does the term "preferred" mean that preferred stock is a better investment than common stock?

When a company borrows more money how are the debt to equity and return on equity affected assuming income before interest and taxes remain the same? Debt to Equity Return on Equity

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters