Question 1

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

Accepted Answer

A) Issued. 
B) Authorized. 
C) Subscribed. 
D) Outstanding. 
E) In treasury. 
A) Issued. 
B) Authorized. 
C) Subscribed. 
D) Outstanding. 
E) In treasury.

Question 2

________________ is a class of stock assigned a value by the corporation in its charter.

Accepted Answer

The answer of ________________ is a class of stock assigned...

Question 3

A class of stock that does not have a par value,and can usually be issued at any price without creating a minimum legal capital deficiency,is called:

Accepted Answer

A) Convertible stock. 
B) No-par stock. 
C) Callable stock. 
D) Noncumulative stock. 
E) Discounted stock. 
A) Convertible stock. 
B) No-par stock. 
C) Callable stock. 
D) Noncumulative stock. 
E) Discounted stock.

Question 4

A company has $100,000 of 10% noncumulative,nonparticipating,preferred stock outstanding,and $150,000 of common stock outstanding.In the company's first year of operation,no dividends were paid,but during the second year,it paid cash dividends of $25,000.Compute the dividends to be distributed to (1)preferred shares and (2)common shares.

Accepted Answer

(1)Preferred: 10% x

Question 5

Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called:

Accepted Answer

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

Question 6

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Accepted Answer

The price-earnings ratio of a common sto

Question 8

__________________________ is the annual amount of cash dividends distributed to common shareholders relative to the stock's market price.

Accepted Answer

The answer of __________________________ is the annual amount of cash...

Question 9

What is a corporation?
 Identify the key advantages and disadvantages of corporations.

Accepted Answer

A corporation is a legal entity separate

Question 10

A corporation had current year net income of $2,375,000.It paid preferred dividends of $80,000 cash and had 500,000 weighted-average shares of common stock outstanding.Calculate the corporation's earnings per share.

Accepted Answer

Earnings per Share = Net Incom

Question 11

Common shareholders always share equally with all other shareholders in all dividends.

Accepted Answer

A) True 
 B)False

Question 12

A company was organized in January 2012 and has 2,000 shares of $100 par value,10%,nonparticipating preferred stock outstanding and 30,000 shares of $10 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

Accepted Answer

@#IMG-DLM& Preferred dividend:

Question 13

The statement of changes in stockholders' equity:

Accepted Answer

A) Is part of the statement of retained earnings. 
B) Shows only the ending balances in stockholders' equity. 
C) Describes changes in paid-in capital and retained earnings subcategories. 
D) Does not include changes in treasury stock. 
E) Is reported by very few companies. 
A) Is part of the statement of retained earnings. 
B) Shows only the ending balances in stockholders' equity. 
C) Describes changes in paid-in capital and retained earnings subcategories. 
D) Does not include changes in treasury stock. 
E) Is reported by very few companies.

Question 14

Retained earnings:

Accepted Answer

A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception. 
B) Can only be appropriated by setting aside a cash fund. 
C) Represent an amount of cash available to pay shareholders. 
D) Are never adjusted for anything other than net income or dividends. 
E) All of the choices are correct. 
A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception. 
B) Can only be appropriated by setting aside a cash fund. 
C) Represent an amount of cash available to pay shareholders. 
D) Are never adjusted for anything other than net income or dividends. 
E) All of the choices are correct.

Question 15

The date the directors vote to pay a dividend is called the:

Accepted Answer

A) Date of stockholders' meeting. 
B) Date of declaration. 
C) Date of record. 
D) Date of payment. 
E) Liquidating date. 
A) Date of stockholders' meeting. 
B) Date of declaration. 
C) Date of record. 
D) Date of payment. 
E) Liquidating date.

Question 16

_______________________ are responsible for and have final authority for managing a corporation's activities.

Accepted Answer

The board

Question 17

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by equal amounts.

Accepted Answer

A) True 
 B)False

Question 18

Dividend yield is computed by dividing annual cash dividends per share by the market value per share.

Accepted Answer

A) True 
 B)False

Question 19

A stock split increases total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 20

Stated value stock is par stock that is assigned a value per share by the corporation's board of directors.

Accepted Answer

A) True 
 B)False

Exam 13: Accounting for Corporations

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

________________ is a class of stock assigned a value by the corporation in its charter.

A class of stock that does not have a par value,and can usually be issued at any price without creating a minimum legal capital deficiency,is called:

Preferred stock with a feature allowing preferred stockholders to share with common shareholders in any dividends in excess of the percent or dollar amount stated on the preferred stock is called:

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

__________________________ is the annual amount of cash dividends distributed to common shareholders relative to the stock's market price.

What is a corporation? Identify the key advantages and disadvantages of corporations.

A corporation had current year net income of $2,375,000.It paid preferred dividends of $80,000 cash and had 500,000 weighted-average shares of common stock outstanding.Calculate the corporation's earnings per share.

Common shareholders always share equally with all other shareholders in all dividends.

The statement of changes in stockholders' equity:

Retained earnings:

The date the directors vote to pay a dividend is called the:

_______________________ are responsible for and have final authority for managing a corporation's activities.

Purchasing treasury stock reduces the corporation's assets and stockholders' equity by equal amounts.

Dividend yield is computed by dividing annual cash dividends per share by the market value per share.

A stock split increases total stockholders' equity.

Stated value stock is par stock that is assigned a value per share by the corporation's board of directors.

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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