Question 1

The issuance of common stock affects both paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a reason to undergo a reverse stock split?

Accepted Answer

A) To reduce the stock's market price per share. 
B) To increase total stockholders' equity. 
C) To reduce total stockholders' equity. 
D) To increase the market value of the stock per share. 
A) To reduce the stock's market price per share. 
B) To increase total stockholders' equity. 
C) To reduce total stockholders' equity. 
D) To increase the market value of the stock per share.

Question 3

Payroll taxes levied against employees become liabilities:

Accepted Answer

A) on the first of the following month. 
B) at the time the liability for the employees' wages is paid. 
C) when earned by the employee. 
D) at the end of an accounting period. 
A) on the first of the following month. 
B) at the time the liability for the employees' wages is paid. 
C) when earned by the employee. 
D) at the end of an accounting period.

Question 4

Three dates included in a dividend announcement are date of declaration,date of record,and .

Accepted Answer

A) date of acceptance 
B) date of payment 
C) date of order 
D) date of liquidation 
A) date of acceptance 
B) date of payment 
C) date of order 
D) date of liquidation

Question 5

Most employers are required to withhold from employees for:

Accepted Answer

A) both federal and state unemployment compensation. 
B) only federal unemployment compensation tax. 
C) only federal income tax. 
D) only state unemployment compensation tax. 
A) both federal and state unemployment compensation. 
B) only federal unemployment compensation tax. 
C) only federal income tax. 
D) only state unemployment compensation tax.

Question 6

An employee receives an hourly rate of $27,with time and a half for all hours worked in excess of 40 during a week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$350; cumulative earnings for year prior to current week,$99,700; social security tax rate,6.0% on maximum of $106,800; and Medicare tax rate,1.5% on all earnings.What is the net pay for the employee?

Accepted Answer

A) $798.85 
B) $873.77 
C) $953.16 
D) $1,223.77 
A) $798.85 
B) $873.77 
C) $953.16 
D) $1,223.77

Question 7

When the contract rate of interest on bonds is less than the market rate of interest,the bonds sell at:

Accepted Answer

A) a premium. 
B) their face value. 
C) their maturity value. 
D) a discount. 
A) a premium. 
B) their face value. 
C) their maturity value. 
D) a discount.

Question 8

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 75,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Accepted Answer

A) 10,000 
B) 70,000 
C) 50,000 
D) 60,000 
A) 10,000 
B) 70,000 
C) 50,000 
D) 60,000

Question 9

Indicate whether the following actions would (+)increase,(-)decrease,or (0)not affect a company's total assets,liabilities,and stockholders' equity.

Accepted Answer

Assets Liabilities Stockholders' Equity

Question 10

Gross earnings for a payroll period less payroll deductions are referred to as:

Accepted Answer

A) overtime pay. 
B) bonus pay. 
C) gross pay. 
D) net pay. 
A) overtime pay. 
B) bonus pay. 
C) gross pay. 
D) net pay.

Question 11

The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

Accepted Answer

A) True 
 B)False

Question 12

If the market rate of interest is greater than the contractual rate of interest,bonds will sell:

Accepted Answer

A) at a premium. 
B) at face value. 
C) at a discount. 
D) only after the stated rate of interest is increased. 
A) at a premium. 
B) at face value. 
C) at a discount. 
D) only after the stated rate of interest is increased.

Question 13

The amount of capital paid-in by the stockholders of the corporation is called legal capital.

Accepted Answer

A) True 
 B)False

Question 14

If paid-in capital in excess of par--preferred stock is $80,000,preferred stock is $500,000,paid-in capital in excess of par--common stock is $50,000,common stock is $1,000,000,and retained earnings is $230,000,the total stockholders' equity is $1,860,000.

Accepted Answer

A) True 
 B)False

Question 15

Bonds are sold at face value when the contract rate is equal to the market rate of interest.

Accepted Answer

A) True 
 B)False

Question 16

When a corporation issues bonds,it executes a contract with the bondholders known as a bond debenture.

Accepted Answer

A) True 
 B)False

Question 17

Before a stock dividend can be declared or paid,there must be sufficient cash.

Accepted Answer

A) True 
 B)False

Question 18

How is treasury stock shown on the balance sheet?

Accepted Answer

A) As an addition to assets 
B) As a reduction of stockholders' equity 
C) As an addition to stockholders' equity 
D) Treasury stock is not shown on the balance sheet. 
A) As an addition to assets 
B) As a reduction of stockholders' equity 
C) As an addition to stockholders' equity 
D) Treasury stock is not shown on the balance sheet.

Question 19

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 20

One of the conditions for paying a cash dividend is sufficient retained earnings.

Accepted Answer

A) True 
 B)False

The issuance of common stock affects both paid-in capital and retained earnings.

Which of the following is a reason to undergo a reverse stock split?

Payroll taxes levied against employees become liabilities:

Three dates included in a dividend announcement are date of declaration,date of record,and .

Most employers are required to withhold from employees for:

When the contract rate of interest on bonds is less than the market rate of interest,the bonds sell at:

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 75,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Indicate whether the following actions would (+)increase,(-)decrease,or (0)not affect a company's total assets,liabilities,and stockholders' equity.

Gross earnings for a payroll period less payroll deductions are referred to as:

The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

If the market rate of interest is greater than the contractual rate of interest,bonds will sell:

The amount of capital paid-in by the stockholders of the corporation is called legal capital.

If paid-in capital in excess of par--preferred stock is $80,000,preferred stock is $500,000,paid-in capital in excess of par--common stock is $50,000,common stock is $1,000,000,and retained earnings is $230,000,the total stockholders' equity is $1,860,000.

Bonds are sold at face value when the contract rate is equal to the market rate of interest.

When a corporation issues bonds,it executes a contract with the bondholders known as a bond debenture.

Before a stock dividend can be declared or paid,there must be sufficient cash.

How is treasury stock shown on the balance sheet?

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

One of the conditions for paying a cash dividend is sufficient retained earnings.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 8: Liabilities and Stockholders Equity

The issuance of common stock affects both paid-in capital and retained earnings.

Which of the following is a reason to undergo a reverse stock split?

Payroll taxes levied against employees become liabilities:

Three dates included in a dividend announcement are date of declaration,date of record,and .

Most employers are required to withhold from employees for:

When the contract rate of interest on bonds is less than the market rate of interest,the bonds sell at:

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 75,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Indicate whether the following actions would (+)increase,(-)decrease,or (0)not affect a company's total assets,liabilities,and stockholders' equity.

Gross earnings for a payroll period less payroll deductions are referred to as:

The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

If the market rate of interest is greater than the contractual rate of interest,bonds will sell:

The amount of capital paid-in by the stockholders of the corporation is called legal capital.

If paid-in capital in excess of par--preferred stock is $80,000,preferred stock is $500,000,paid-in capital in excess of par--common stock is $50,000,common stock is $1,000,000,and retained earnings is $230,000,the total stockholders' equity is $1,860,000.

Bonds are sold at face value when the contract rate is equal to the market rate of interest.

When a corporation issues bonds,it executes a contract with the bondholders known as a bond debenture.

Before a stock dividend can be declared or paid,there must be sufficient cash.

How is treasury stock shown on the balance sheet?

Obligations that depend on past events and that are based on future transactions are contingent liabilities.

One of the conditions for paying a cash dividend is sufficient retained earnings.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters