Question 1

When all of the authorized shares have the same rights and characteristics,the stock is called

Accepted Answer

A) Preferred stock. 
B) Common stock. 
C) Par value stock. 
D) Stated value stock. 
E) No-par value stock. 
A) Preferred stock. 
B) Common stock. 
C) Par value stock. 
D) Stated value stock. 
E) No-par value stock.

Question 2

A debit balance in retained earnings is referred to as a retained earnings deficit.

Accepted Answer

A) True 
 B)False

Question 3

On July 31,a company declared a cash dividend of $0.25 per common share to the shareholders of record on August 15.The cash dividend will be paid on August 25.This company has 500,000 shares authorized and 100,000 shares outstanding.Prepare the journal entries required on July 31,August 15 and August 25.

Accepted Answer

The answer of On July 31,a company declared a cash...

Question 4

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

Accepted Answer

A) Financial leverage. 
B) Discount on stock. 
C) Premium on stock. 
D) Preemptive right. 
E) Capital gain. 
A) Financial leverage. 
B) Discount on stock. 
C) Premium on stock. 
D) Preemptive right. 
E) Capital gain.

Question 5

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Accepted Answer

A) True 
 B)False

Question 6

A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

Accepted Answer

A) A debit to Common Stock for $60,000. 
B) A debit to Land for $60,000. 
C) A credit to Land for $60,000. 
D) A credit to Paid-in Capital in Excess of Par Value, Common Stock for $24,000. 
E) A credit to Common Stock for $84,000. 
A) A debit to Common Stock for $60,000. 
B) A debit to Land for $60,000. 
C) A credit to Land for $60,000. 
D) A credit to Paid-in Capital in Excess of Par Value, Common Stock for $24,000. 
E) A credit to Common Stock for $84,000.

Question 7

Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.

Accepted Answer

A) True 
 B)False

Question 8

Companies report the cost of stock options in the:

Accepted Answer

A) Statement of cash flows. 
B) Balance sheet. 
C) Statement of retained earnings. 
D) Income statement. 
E) No disclosure is required. 
A) Statement of cash flows. 
B) Balance sheet. 
C) Statement of retained earnings. 
D) Income statement. 
E) No disclosure is required.

Question 9

Explain the difference between a large stock dividend and a small stock dividend.In addition,explain how to record these two types of stock dividends.

Accepted Answer

A large stock dividend is a distribution

Question 10

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

Accepted Answer

A) Participating preferred stock. 
B) Callable preferred stock. 
C) Cumulative preferred stock. 
D) Convertible preferred stock. 
E) Noncumulative preferred stock. 
A) Participating preferred stock. 
B) Callable preferred stock. 
C) Cumulative preferred stock. 
D) Convertible preferred stock. 
E) Noncumulative preferred stock.

Question 11

What are the rights generally granted to common stockholders?

Accepted Answer

Common stockholders generally have the r

Question 12

On May 1,a company's board of directors declared a 10% stock dividend to be distributed on June 1 to the stockholders of record on May 21.The company had 250,000 shares of $10 par value common stock outstanding with a market value of $22 per share.Prepare the journal entries required on May 1,May 21,and June 1.

Accepted Answer

The answer of On May 1,a company's board of directors...

Question 13

A corporation paid a cash dividend of $0.07 per share during the current year.It had 550,000 common shares outstanding at year-end,its current year earnings per share was $3.85,and the stock's year-end market price was $17.50 per share.Calculate the company's dividend yield.

Accepted Answer

Dividend Yield = Cash Dividend

Question 14

Corporations are subject to substantially fewer regulations and laws than are proprietorships and partnerships.

Accepted Answer

A) True 
 B)False

Question 15

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 weighted-average shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

Accepted Answer

Price-Earnings Ratio = Market Price per

Question 16

Book value per common share is calculated by dividing stockholders' equity applicable to common shares by the number of common shares outstanding.

Accepted Answer

A) True 
 B)False

Question 17

Par value of a stock refers to the:

Accepted Answer

A) Issue price of the stock. 
B) Value assigned per share of stock by the corporate charter. 
C) Market value of the stock on the date of the financial statements. 
D) Maximum selling price of the stock. 
E) Dividend value of the stock. 
A) Issue price of the stock. 
B) Value assigned per share of stock by the corporate charter. 
C) Market value of the stock on the date of the financial statements. 
D) Maximum selling price of the stock. 
E) Dividend value of the stock.

Question 18

Stock that is retired is the same as authorized and unissued stock.

Accepted Answer

A) True 
 B)False

Question 19

Unpaid and undeclared preferred dividends are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 20

Stock that has been issued and is held by stockholders is ___________________ stock.

Accepted Answer

The answer of Stock that has been issued and is...

Exam 13: Accounting for Corporations

When all of the authorized shares have the same rights and characteristics,the stock is called

A debit balance in retained earnings is referred to as a retained earnings deficit.

Achieving an increased return on common stock by paying dividends on preferred stock at a rate that is less than the rate of return earned with the assets invested from the preferred stock issuance is called:

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

A corporation issued 6,000 shares of its $10 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.

Companies report the cost of stock options in the:

Explain the difference between a large stock dividend and a small stock dividend.In addition,explain how to record these two types of stock dividends.

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

What are the rights generally granted to common stockholders?

A corporation paid a cash dividend of $0.07 per share during the current year.It had 550,000 common shares outstanding at year-end,its current year earnings per share was $3.85,and the stock's year-end market price was $17.50 per share.Calculate the company's dividend yield.

Corporations are subject to substantially fewer regulations and laws than are proprietorships and partnerships.

A corporation reported net income of $3,730,000 and paid preferred cash dividends of $100,000 during the current year.There were 600,000 weighted-average shares of common stock outstanding and the market price per common share was $88.33 at year-end.Calculate the company's price-earnings ratio.

Book value per common share is calculated by dividing stockholders' equity applicable to common shares by the number of common shares outstanding.

Par value of a stock refers to the:

Stock that is retired is the same as authorized and unissued stock.

Unpaid and undeclared preferred dividends are called dividends in arrears.

Stock that has been issued and is held by stockholders is ___________________ stock.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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