Question 1

The Stockholders' Equity section of the balance sheet reports contributed capital separate from corporate retained earnings.

Accepted Answer

A) True 
 B)False

Question 2

The effect of an event or transaction that is infrequent in occurrence and highly unusual in nature is shown as a(n)--------on the income statement.

Accepted Answer

The answer of The effect of an event or transaction...

Question 3

The entry to record the distribution of a stock dividend includes a debit to Common Stock Dividend Distributable.

Accepted Answer

A) True 
 B)False

Question 4

A corporation reported a net income of $82,000 for its fiscal year and declared and paid cash dividends of $51,000 and declared and distributed a stock dividend recorded at $35,000. If the ending balance of the Retained Earnings account was $210,000, the beginning balance was:

Accepted Answer

A) $206,000. 
B) $241,000. 
C) $179,000. 
D) $214,000. 
A) $206,000. 
B) $241,000. 
C) $179,000. 
D) $214,000.

Question 5

A corporation paid estimated income taxes of $59,000 during 2019. At the end of the year, the corporation's tax bill is computed to be $70,000. Record the entry to adjust the Income Tax Expense account on page 6 of a general journal. Omit the description.

Accepted Answer

The answer of A corporation paid estimated income taxes of...

Question 6

A corporation may report a net income amount for federal income tax purposes that differs from the amount reported for financial accounting purposes.

Accepted Answer

A) True 
 B)False

Question 7

The entry to record the declaration of a stock split includes a debit to Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 8

Match between columns
                        Premises: Equity account used to record par, or stated, value of shares to be issued as the result of the declaration of a stock dividend
A corporation's own capital stock that has been issued and reacquired; the stock must have been previously paid in full and issued to a stockholder
The date on which the specific stockholders to receive a dividend are determined
Capital acquired from capital stock transactions
When a corporation issues two or more shares of new stock to replace each share outstandin without making any changes in the capital accounts
The cumulative profits and losses of the corporation not distributed as dividends
Distribution of the corporation's own stock on a pro rata basis that results in conversion of a portion of the firm's retained earnings to permanent capital
A financial statement that shows all changes that have occurred in retained earnings during the period
The total equity applicable to a class of stock divided by the number of shares outstanding
A formal declaration of an intention to restrict dividends
A financial statement that provides an analysis reconciling the beginning and ending balance of each of the stockholders' equity accounts.
Capital resulting from the receipt of gifts by a corporation
The amount of taxes that will be payable in the future as a result of the difference between taxable income and income for financial statement purposes in the current year and in past years
The date that dividends are paid
Stockholders in whose name shares are held on date of record and who will receive a declared dividend
Transactions that are highly unusual, clearly unrelated to routine operations, and that do not frequently occur
The date on which the board of directors declares a dividend

Accepted Answer

The Answer of Stockholders of record and Common Stock Dividend is...

Question 9

The declaration of a cash dividend will result in a decrease in:

Accepted Answer

A) Cash. 
B) Contributed capital. 
C) Retained earnings. 
D) Income taxes. 
A) Cash. 
B) Contributed capital. 
C) Retained earnings. 
D) Income taxes.

Question 10

The entry to record the income tax payable would include debit to Retained Earnings and a credit to Income Tax Payable.

Accepted Answer

A) True 
 B)False

Question 11

A corporation reported net income of $240,000 for its fiscal year and declared and paid cash dividends of $96,000. A stock dividend recorded at $36,000 was also distributed during the year. If the ending balance of the Retained Earnings account was $325,000, calculate the beginning balance in the Retained Earnings account.

Accepted Answer

$217,000
$325,000 =

Question 12

A corporation had 60,000 shares of $8 par value common stock outstanding on November 1 with no preferred stock issued or outstanding. The company's retained earnings was $250,000 and total stockholders' equity was $800,000. Later that day, the board declared a 10% stock dividend when the market value of each share was $25. Shortly after declaration, the market value fell to $22.50 per share. Sam Lewis owned 350 shares of stock prior to the declaration. After the stock dividend, the total book value of Lewis' stock after receiving additional shares was:

Accepted Answer

A) $2,800. 
B) $3,080. 
C) $4,666. 
D) $5,132. 
A) $2,800. 
B) $3,080. 
C) $4,666. 
D) $5,132.

Question 13

The formal method by which a company can restrict dividend distributions is called:

Accepted Answer

A) Deferral. 
B) Reserve. 
C) Declaration. 
D) Appropriation. 
A) Deferral. 
B) Reserve. 
C) Declaration. 
D) Appropriation.

Question 14

A 3-for-2 stock split will triple the reported dollar amount of stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 15

The effect of issuing a stock dividend is to convert a portion of the corporation's---------- to permanent capital.

Accepted Answer

The answer of The effect of issuing a stock dividend...

Question 16

Cash dividends decrease total stockholder's equity but stock dividends have a net zero effect on total stockholder's equity.

Accepted Answer

A) True 
 B)False

Question 17

The entry to record the payment of a cash dividend includes a debit to Retained Earnings and a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is not correct?

Accepted Answer

A) Retained earnings represents a cash fund. 
B) A corporation can have a large cash balance but no retained earnings. 
C) A corporation can have a balance in the Retained Earnings account but no cash. 
D) Retained earnings represent the undistributed profits and losses of the corporation. 
A) Retained earnings represents a cash fund. 
B) A corporation can have a large cash balance but no retained earnings. 
C) A corporation can have a balance in the Retained Earnings account but no cash. 
D) Retained earnings represent the undistributed profits and losses of the corporation.

Question 19

Deferred income taxes arise because the taxable income of a corporation can differ from the net income reported on its financial statements.

Accepted Answer

A) True 
 B)False

Question 20

A corporation paid estimated income taxes of $80,000 during 2019. At the end of the year, the corporation's tax bill is computed to be $100,000. Record the entry to adjust the Income Tax Expense account on page 6 of a general journal. Omit the description.

Accepted Answer

The answer of A corporation paid estimated income taxes of...

Exam 21: Corporate Earnings and Capital Transactions

The Stockholders' Equity section of the balance sheet reports contributed capital separate from corporate retained earnings.

The effect of an event or transaction that is infrequent in occurrence and highly unusual in nature is shown as a(n)--------on the income statement.

The entry to record the distribution of a stock dividend includes a debit to Common Stock Dividend Distributable.

A corporation reported a net income of $82,000 for its fiscal year and declared and paid cash dividends of $51,000 and declared and distributed a stock dividend recorded at $35,000. If the ending balance of the Retained Earnings account was $210,000, the beginning balance was:

A corporation paid estimated income taxes of $59,000 during 2019. At the end of the year, the corporation's tax bill is computed to be $70,000. Record the entry to adjust the Income Tax Expense account on page 6 of a general journal. Omit the description.

A corporation may report a net income amount for federal income tax purposes that differs from the amount reported for financial accounting purposes.

The entry to record the declaration of a stock split includes a debit to Retained Earnings.

The declaration of a cash dividend will result in a decrease in:

The entry to record the income tax payable would include debit to Retained Earnings and a credit to Income Tax Payable.

The formal method by which a company can restrict dividend distributions is called:

A 3-for-2 stock split will triple the reported dollar amount of stockholders' equity.

The effect of issuing a stock dividend is to convert a portion of the corporation's---------- to permanent capital.

Cash dividends decrease total stockholder's equity but stock dividends have a net zero effect on total stockholder's equity.

The entry to record the payment of a cash dividend includes a debit to Retained Earnings and a credit to Cash.

Which of the following statements is not correct?

Deferred income taxes arise because the taxable income of a corporation can differ from the net income reported on its financial statements.

A corporation paid estimated income taxes of $80,000 during 2019. At the end of the year, the corporation's tax bill is computed to be $100,000. Record the entry to adjust the Income Tax Expense account on page 6 of a general journal. Omit the description.

Accounting: The Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and Teh Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Cash Receipts, Cash Payments, and Banking Procedures

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Long-Term Bonds

Financial Statement Analysis

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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