Question 1

A 10% stock dividend will increase the book value per share.

Accepted Answer

A) True 
 B)False

Question 2

Current liabilities are:

Accepted Answer

A) due but not receivable for more than one year. 
B) due but not payable for more than one year. 
C) due and receivable within one year. 
D) due and payable within one year. 
A) due but not receivable for more than one year. 
B) due but not payable for more than one year. 
C) due and receivable within one year. 
D) due and payable within one year.

Question 3

A corporation,which had 20,000 shares of common stock outstanding,declared a 3-for-1 stock split.
(a)	What will be the number of shares outstanding after the split?
(b)	If the common stock had a market price of $240 per share before the stock split, what would be an approximate market price per share after the split?

Accepted Answer

(a)60,000

Question 4

A is a contract between the corporation issuing the bonds and the bondholders.

Accepted Answer

A) bond debenture 
B) bond premium 
C) bond indenture 
D) bond discount 
A) bond debenture 
B) bond premium 
C) bond indenture 
D) bond discount

Question 5

The major subdivisions of the Stockholders' Equity section of the balance sheet are:

Accepted Answer

A) Paid-in Capital and Retained Earnings. 
B) Common Stock and Preferred Stock. 
C) Issued Capital,and Authorized Capital. 
D) Expenses and incomes. 
A) Paid-in Capital and Retained Earnings. 
B) Common Stock and Preferred Stock. 
C) Issued Capital,and Authorized Capital. 
D) Expenses and incomes.

Question 6

The primary purpose of a stock split is to:

Accepted Answer

A) increase paid-in capital. 
B) reduce the market price of the stock per share. 
C) increase the market price of the stock per share. 
D) increase retained earnings. 
A) increase paid-in capital. 
B) reduce the market price of the stock per share. 
C) increase the market price of the stock per share. 
D) increase retained earnings.

Question 7

What are current liabilities?

Accepted Answer

A) Liabilities that are due and payable within two years. 
B) Liabilities that are due and to be paid out of current assets within one year. 
C) Liabilities that are due but not payable for more than one year. 
D) Liabilities that are payable if a possible subsequent event occurs. 
A) Liabilities that are due and payable within two years. 
B) Liabilities that are due and to be paid out of current assets within one year. 
C) Liabilities that are due but not payable for more than one year. 
D) Liabilities that are payable if a possible subsequent event occurs.

Question 8

A company sold 200 shares of common stock with a par value of $5 at a price of $13 per share.What is the effect on the accounts of this transaction?

Accepted Answer

A) Increase cash $2,600; increase retained earnings $2,600 
B) Increase cash $1,000; increase common stock $1,000 
C) Increase cash $2,600; increase common stock $1,000 and increase paid-in capital $1,600 
D) Increase cash $2,600; increase common stock $1,600 and increase paid-in capital $1,000 
A) Increase cash $2,600; increase retained earnings $2,600 
B) Increase cash $1,000; increase common stock $1,000 
C) Increase cash $2,600; increase common stock $1,000 and increase paid-in capital $1,600 
D) Increase cash $2,600; increase common stock $1,600 and increase paid-in capital $1,000

Question 9

A company has total assets of $320,000,total liabilities of $180,000,and total stockholders' equity of $140,000.Calculate the ratio of liabilities to total assets.

Accepted Answer

A) 43.75% 
B) 77.77% 
C) 65.25% 
D) 56.25% 
A) 43.75% 
B) 77.77% 
C) 65.25% 
D) 56.25%

Question 10

Paid-in capital and retained earnings are the two major categories of stockholders' equity for a corporation.

Accepted Answer

A) True 
 B)False

Question 11

For the year that just ended,a company reports net income of $1,500,000.There are 500,000 shares authorized,300,000 shares issued,and 250,000 shares of common stock outstanding.What is the earnings per share?

Accepted Answer

A) $5.00 
B) $2.50 
C) $6.00 
D) $3.00 
A) $5.00 
B) $2.50 
C) $6.00 
D) $3.00

Question 12

When the market rate of interest on bonds is equal to the contract rate,the bonds will sell at:

Accepted Answer

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

Question 13

The declaration of a cash dividend decreases a corporation's stockholders' equity and increases its liabilities.

Accepted Answer

A) True 
 B)False

Question 14

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

Accepted Answer

A) 5,000 
B) 35,000 
C) 45,000 
D) 55,000 
A) 5,000 
B) 35,000 
C) 45,000 
D) 55,000

Question 15

If 50,000 shares are authorized,35,000 shares are issued,and 2,000 shares are reacquired,the number of outstanding shares is 33,000.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a reason for a corporation to buy back its own stock?

Accepted Answer

A) To increase liquidity 
B) To increase solvency 
C) To increase the shares outstanding 
D) To reissue as bonuses to employees 
A) To increase liquidity 
B) To increase solvency 
C) To increase the shares outstanding 
D) To reissue as bonuses to employees

Question 17

A corporation has 50,000 shares of $100 par value stock outstanding that has a current market value of $180.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately:

Accepted Answer

A) $30. 
B) $36. 
C) $45. 
D) $50. 
A) $30. 
B) $36. 
C) $45. 
D) $50.

Question 18

When the market rate of interest is more than the contract rate of a bond,the bond will sell for a discount.

Accepted Answer

A) True 
 B)False

Question 19

Liabilities that are due and payable beyond one year or paid out of noncurrent assets are termed long-term liabilities.

Accepted Answer

A) True 
 B)False

Question 20

The market interest rate related to a bond is also called the:

Accepted Answer

A) stated interest rate. 
B) effective interest rate. 
C) contract interest rate. 
D) straight-line rate. 
A) stated interest rate. 
B) effective interest rate. 
C) contract interest rate. 
D) straight-line rate.

A 10% stock dividend will increase the book value per share.

Current liabilities are:

A is a contract between the corporation issuing the bonds and the bondholders.

The major subdivisions of the Stockholders' Equity section of the balance sheet are:

The primary purpose of a stock split is to:

What are current liabilities?

A company sold 200 shares of common stock with a par value of $5 at a price of $13 per share.What is the effect on the accounts of this transaction?

A company has total assets of $320,000,total liabilities of $180,000,and total stockholders' equity of $140,000.Calculate the ratio of liabilities to total assets.

Paid-in capital and retained earnings are the two major categories of stockholders' equity for a corporation.

For the year that just ended,a company reports net income of $1,500,000.There are 500,000 shares authorized,300,000 shares issued,and 250,000 shares of common stock outstanding.What is the earnings per share?

When the market rate of interest on bonds is equal to the contract rate,the bonds will sell at:

The declaration of a cash dividend decreases a corporation's stockholders' equity and increases its liabilities.

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

If 50,000 shares are authorized,35,000 shares are issued,and 2,000 shares are reacquired,the number of outstanding shares is 33,000.

Which of the following is a reason for a corporation to buy back its own stock?

A corporation has 50,000 shares of $100 par value stock outstanding that has a current market value of $180.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately:

When the market rate of interest is more than the contract rate of a bond,the bond will sell for a discount.

Liabilities that are due and payable beyond one year or paid out of noncurrent assets are termed long-term liabilities.

The market interest rate related to a bond is also called the:

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

A 10% stock dividend will increase the book value per share.

Current liabilities are:

A is a contract between the corporation issuing the bonds and the bondholders.

The major subdivisions of the Stockholders' Equity section of the balance sheet are:

The primary purpose of a stock split is to:

What are current liabilities?

A company sold 200 shares of common stock with a par value of $5 at a price of $13 per share.What is the effect on the accounts of this transaction?

A company has total assets of $320,000,total liabilities of $180,000,and total stockholders' equity of $140,000.Calculate the ratio of liabilities to total assets.

Paid-in capital and retained earnings are the two major categories of stockholders' equity for a corporation.

For the year that just ended,a company reports net income of $1,500,000.There are 500,000 shares authorized,300,000 shares issued,and 250,000 shares of common stock outstanding.What is the earnings per share?

When the market rate of interest on bonds is equal to the contract rate,the bonds will sell at:

The declaration of a cash dividend decreases a corporation's stockholders' equity and increases its liabilities.

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired.What is the number of shares outstanding?

If 50,000 shares are authorized,35,000 shares are issued,and 2,000 shares are reacquired,the number of outstanding shares is 33,000.

Which of the following is a reason for a corporation to buy back its own stock?

A corporation has 50,000 shares of $100 par value stock outstanding that has a current market value of $180.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately:

When the market rate of interest is more than the contract rate of a bond,the bond will sell for a discount.

Liabilities that are due and payable beyond one year or paid out of noncurrent assets are termed long-term liabilities.

The market interest rate related to a bond is also called the:

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