Question 1

In the Stockholders' Equity section of a Balance Sheet:

Accepted Answer

A) common stock goes first. 
B) preferred stock goes first. 
C) Retained Earnings goes first. 
D) assets are listed first. 
A) common stock goes first. 
B) preferred stock goes first. 
C) Retained Earnings goes first. 
D) assets are listed first.

Question 2

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 3

If you own 800 shares (3% of a corporation's stock)and the corporation issues 10,000 new shares,how many of the new shares can your purchase under preemptive right?

Accepted Answer

A) 0 
B) 300 
C) 800 
D) 1,100 
A) 0 
B) 300 
C) 800 
D) 1,100

Question 4

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

Accepted Answer

A) $70,000. 
B) $83,730. 
C) $76,380. 
D) $77,350. 
A) $70,000. 
B) $83,730. 
C) $76,380. 
D) $77,350.

Question 5

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 6

Paying dividends causes a decrease in total assets,but an increase in total Stockholders' Equity.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

The entry to record selling 300 shares of stated value $60 common stock for $70 per share would be:

Accepted Answer

A) debit Cash $21,000;credit Common Stock $21,000. 
B) debit Cash $18,000;credit Common Stock $18,000. 
C) debit Cash $18,000;debit Paid-in Capital in Excess of Stated Value-$3,000;credit Common Stock $21,000. 
D) debit Cash $21,000;credit Common Stock $18,000;credit Paid-in Capital in Excess of Stated Value-$3,000. 
A) debit Cash $21,000;credit Common Stock $21,000. 
B) debit Cash $18,000;credit Common Stock $18,000. 
C) debit Cash $18,000;debit Paid-in Capital in Excess of Stated Value-$3,000;credit Common Stock $21,000. 
D) debit Cash $21,000;credit Common Stock $18,000;credit Paid-in Capital in Excess of Stated Value-$3,000.

Question 9

Stockholders' Equity consists of:

Accepted Answer

A) contributed capital and paid-in capital. 
B) common stock and preferred stock. 
C) paid-in capital and Retained Earnings. 
D) legal capital and paid in capital. 
A) contributed capital and paid-in capital. 
B) common stock and preferred stock. 
C) paid-in capital and Retained Earnings. 
D) legal capital and paid in capital.

Question 10

Which right do preferred stockholders receive before common stockholders?

Accepted Answer

A) Selling rights 
B) Dividend rights 
C) Voting rights 
D) Preemptive rights 
A) Selling rights 
B) Dividend rights 
C) Voting rights 
D) Preemptive rights

Question 11

Which of the following is NOT an advantage of a corporation?

Accepted Answer

A) Unlimited liability 
B) Ease of raising capital 
C) Ease of transfer ownership 
D) Continuous life 
A) Unlimited liability 
B) Ease of raising capital 
C) Ease of transfer ownership 
D) Continuous life

Question 12

Which is NOT included in paid-in capital?

Accepted Answer

A) Preferred Stock 
B) Common Stock 
C) Cash 
D) Additional Paid-in Capital 
A) Preferred Stock 
B) Common Stock 
C) Cash 
D) Additional Paid-in Capital

Question 13

Before a 3-for-1 stock split,the shares outstanding were 5,000 shares at $12 par.After the split,what was the par value and number of shares?

Accepted Answer

A) 15,000 shares and $12/share 
B) 20,000 shares and $6/share 
C) 15,000 shares and $4/share 
D) 5,000 shares and $48/share 
A) 15,000 shares and $12/share 
B) 20,000 shares and $6/share 
C) 15,000 shares and $4/share 
D) 5,000 shares and $48/share

Question 14

A stock dividend increases the stockholder's percent of stock held.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is NOT a date associated with cash dividends?

Accepted Answer

A) Date of issuance 
B) Date of declaration 
C) Date of payment 
D) Date of record 
A) Date of issuance 
B) Date of declaration 
C) Date of payment 
D) Date of record

Question 16

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 17

Treasury stock transactions are uncommon among larger corporations.

Accepted Answer

A) True 
 B)False

Question 18

A corporation must incorporate through the local government of any state it chooses.

Accepted Answer

A) True 
 B)False

Question 19

Salty's Seafood has 2,000 shares of $10 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 $16/share.After the distribution,Salty's total Stockholders' Equity should increase or decrease by:

Accepted Answer

A) ($3,200). 
B) $2,000. 
C) $1,200. 
D) $0. 
A) ($3,200). 
B) $2,000. 
C) $1,200. 
D) $0.

Question 20

The formula for return on equity is net income divided by average Stockholders' Equity.

Accepted Answer

A) True 
 B)False

In the Stockholders' Equity section of a Balance Sheet:

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

If you own 800 shares (3% of a corporation's stock)and the corporation issues 10,000 new shares,how many of the new shares can your purchase under preemptive right?

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

Which of the following is TRUE regarding treasury stock?

Paying dividends causes a decrease in total assets,but an increase in total Stockholders' Equity.

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

The entry to record selling 300 shares of stated value $60 common stock for $70 per share would be:

Stockholders' Equity consists of:

Which right do preferred stockholders receive before common stockholders?

Which of the following is NOT an advantage of a corporation?

Which is NOT included in paid-in capital?

Before a 3-for-1 stock split,the shares outstanding were 5,000 shares at $12 par.After the split,what was the par value and number of shares?

A stock dividend increases the stockholder's percent of stock held.

Which of the following is NOT a date associated with cash dividends?

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

Treasury stock transactions are uncommon among larger corporations.

A corporation must incorporate through the local government of any state it chooses.

Salty's Seafood has 2,000 shares of $10 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 $16/share.After the distribution,Salty's total Stockholders' Equity should increase or decrease by:

The formula for return on equity is net income divided by average Stockholders' Equity.

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

In the Stockholders' Equity section of a Balance Sheet:

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

If you own 800 shares (3% of a corporation's stock)and the corporation issues 10,000 new shares,how many of the new shares can your purchase under preemptive right?

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

Which of the following is TRUE regarding treasury stock?

Paying dividends causes a decrease in total assets,but an increase in total Stockholders' Equity.

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

The entry to record selling 300 shares of stated value $60 common stock for $70 per share would be:

Stockholders' Equity consists of:

Which right do preferred stockholders receive before common stockholders?

Which of the following is NOT an advantage of a corporation?

Which is NOT included in paid-in capital?

Before a 3-for-1 stock split,the shares outstanding were 5,000 shares at $12 par.After the split,what was the par value and number of shares?

A stock dividend increases the stockholder's percent of stock held.

Which of the following is NOT a date associated with cash dividends?

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

Treasury stock transactions are uncommon among larger corporations.

A corporation must incorporate through the local government of any state it chooses.

Salty's Seafood has 2,000 shares of $10 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 $16/share.After the distribution,Salty's total Stockholders' Equity should increase or decrease by:

The formula for return on equity is net income divided by average Stockholders' Equity.

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