Question 1

A corporation's residual equity is its

Accepted Answer

A)  preferred stock. 
B)  treasury stock. 
C)  common stock. 
D)  authorized shares of all stock. 
A)  preferred stock. 
B)  treasury stock. 
C)  common stock. 
D)  authorized shares of all stock.

Question 2

The company issued 8,000 shares of stock in exchange for equipment that had a fair market value of $320,000. The entry to record transaction 3 would be:

Accepted Answer

A)  Equipment 320,000
Common Stock 320,000 
B)  Common Stock 320,000
Equipment 320,000 
C)  Additional Paid-in Capital 70,000
Equipment 250,000
Common Stock 320,000 
D)  Cash 320,000
Equipment 320,000 
A)  Equipment 320,000
Common Stock 320,000 
B)  Common Stock 320,000
Equipment 320,000 
C)  Additional Paid-in Capital 70,000
Equipment 250,000
Common Stock 320,000 
D)  Cash 320,000
Equipment 320,000

Question 3

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

Accepted Answer

A)  Common Stock account. 
B)  Preferred Stock account. 
C)  Additional Paid-in Capital. 
D)  Treasury Stock. 
A)  Common Stock account. 
B)  Preferred Stock account. 
C)  Additional Paid-in Capital. 
D)  Treasury Stock.

Question 4

No entry is required on the date of record for a cash dividend.

Accepted Answer

A) True 
 B)False

Question 5

In its 2013 annual report,Etowah Company indicated that the number of common shares held in the treasury decreased from 45,546,171 in 2012 to 3,397,381 in 2013.The following also was reported:
By Board authorization,effective December 31,2013 the Company canceled 50 million shares of common stock held in treasury.As a result of the cancellation,common stock decreased by $62.5 million,capital in excess of par value of stock decreased by $114 million,and retained earnings decreased by $1,559.5 million.
The shares canceled or retired represent almost 25 percent of the shares of common stock issued by Etowah.Using the information above,answer the following questions about Etowah Company in order to explain the accounting for the treasury shares by Etowah.
a.Did the company buy any treasury shares during the year?
b.Prepare the entry in journal form that was made to record the cancellation or retirement of the treasury shares.(Omit explanations.)
c.At what average price were the treasury shares purchased,and at what average price were they originally issued?
d.What do you think was management's reason for purchasing the treasury shares?

Accepted Answer

a.Etowah must have purchased about 8,000

Question 6

Holders of preferred stock normally do not have

Accepted Answer

A)  preference as to dividends. 
B)  preference as to assets in liquidations. 
C)  full voting rights. 
D)  ownership interests in the corporation. 
A)  preference as to dividends. 
B)  preference as to assets in liquidations. 
C)  full voting rights. 
D)  ownership interests in the corporation.

Question 7

Dividends in arrears are dividends on

Accepted Answer

A)  noncumulative preferred stock that have not been declared for some specified period of time. 
B)  common stock that may never be declared. 
C)  cumulative preferred stock that have been declared but not yet paid. 
D)  cumulative preferred stock that have not been declared for some specified period of time. 
A)  noncumulative preferred stock that have not been declared for some specified period of time. 
B)  common stock that may never be declared. 
C)  cumulative preferred stock that have been declared but not yet paid. 
D)  cumulative preferred stock that have not been declared for some specified period of time.

Question 8

The following information relates to the number of common shares of the Montgomery Corporation:
   Calculate the number of outstanding shares from the information given.Show your calculations.

Accepted Answer

135,000 shares outst

Question 9

A disadvantage of the corporate form of business is

Accepted Answer

A)  limited liability. 
B)  professional management. 
C)  ease of transfer of ownership. 
D)  double taxation. 
A)  limited liability. 
B)  professional management. 
C)  ease of transfer of ownership. 
D)  double taxation.

Question 10

How is it possible for a corporation to have more shares issued than it has outstanding?

Accepted Answer

When a corporation buys back s

Question 11

Use the following information to answer the question below. The following transactions involving Culbert Corporation occurred during the year:
  The entry to record the April 1 transaction would be:

Accepted Answer

A)  Cash 80,000
Treasury Stock,Preferred 80,000 
B)  Retained Earnings 80,000
Cash 80,000 
C)  Paid-in Capital,Preferred 80,000
Treasury Stock,Preferred 80,000 
D)  Treasury Stock,Preferred 80,000
Cash 80,000 
A)  Cash 80,000
Treasury Stock,Preferred 80,000 
B)  Retained Earnings 80,000
Cash 80,000 
C)  Paid-in Capital,Preferred 80,000
Treasury Stock,Preferred 80,000 
D)  Treasury Stock,Preferred 80,000
Cash 80,000

Question 12

Prepare the entries in journal form necessary to record the following stock transactions of Fitzgerald Corporation.These transactions represent all treasury stock transactions entered into by the company.(Omit explanations.)

Accepted Answer

The answer of Prepare the entries in journal form necessary...

Question 13

An advantage of the corporate form is that the board cannot hire professional managers to attend to the corporation's affairs.

Accepted Answer

A) True 
 B)False

Question 14

The Additional Paid-in Capital account normally arises in the accounting records when

Accepted Answer

A)  no-par common stock is issued. 
B)  the stated value of capital stock is greater than the par value. 
C)  the par value of the stock exceeds the market value. 
D)  capital stock is issued at an amount greater than par value. 
A)  no-par common stock is issued. 
B)  the stated value of capital stock is greater than the par value. 
C)  the par value of the stock exceeds the market value. 
D)  capital stock is issued at an amount greater than par value.

Question 15

Start-up and organization costs for a corporation that is to operate a retail store would include the costs of

Accepted Answer

A)  promoters' fees and printing stock certificates. 
B)  advertising for a grand opening sale. 
C)  the initial purchase of inventory. 
D)  counters and racks to display merchandise. 
A)  promoters' fees and printing stock certificates. 
B)  advertising for a grand opening sale. 
C)  the initial purchase of inventory. 
D)  counters and racks to display merchandise.

Question 16

Match each definition with the correct term below.
-Statement of stockholders' equity

Accepted Answer

A) The maximum number of shares of stock that a corporation's state charter allows it to issue. 
B) A distribution among stockholders of the assets that a corporation's earnings have generated. 
C) A summary of the changes in the components of the stockholders' equity section of the balance sheet. 
D) A proportional distribution of shares among a corporation's shareholders. 
E) Stock that does not have a par value.
F)Represents a company's total assets minus its liabilities.
G)No-par stock that has a value assigned to it either by the board of directors or the state.
H)A dividend declared by a company that is in excess of its retained earnings.
I)The shares of stock that a corporation sells or otherwise transfers to stockholders.
J)When a corporation increases the number of shares of stock issued and outstanding and reduces the par or stated value proportionally. 
A) The maximum number of shares of stock that a corporation's state charter allows it to issue. 
B) A distribution among stockholders of the assets that a corporation's earnings have generated. 
C) A summary of the changes in the components of the stockholders' equity section of the balance sheet. 
D) A proportional distribution of shares among a corporation's shareholders. 
E) Stock that does not have a par value.
F)Represents a company's total assets minus its liabilities.
G)No-par stock that has a value assigned to it either by the board of directors or the state.
H)A dividend declared by a company that is in excess of its retained earnings.
I)The shares of stock that a corporation sells or otherwise transfers to stockholders.
J)When a corporation increases the number of shares of stock issued and outstanding and reduces the par or stated value proportionally.

Question 17

The sale of shares in a corporation by one stockholder to another does not affect the total capital of the corporation.

Accepted Answer

A) True 
 B)False

A corporation's residual equity is its

The company issued 8,000 shares of stock in exchange for equipment that had a fair market value of $320,000. The entry to record transaction 3 would be:

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

No entry is required on the date of record for a cash dividend.

Holders of preferred stock normally do not have

Dividends in arrears are dividends on

The following information relates to the number of common shares of the Montgomery Corporation: Calculate the number of outstanding shares from the information given.Show your calculations.

A disadvantage of the corporate form of business is

How is it possible for a corporation to have more shares issued than it has outstanding?

Use the following information to answer the question below. The following transactions involving Culbert Corporation occurred during the year: The entry to record the April 1 transaction would be:

Prepare the entries in journal form necessary to record the following stock transactions of Fitzgerald Corporation.These transactions represent all treasury stock transactions entered into by the company.(Omit explanations.)

An advantage of the corporate form is that the board cannot hire professional managers to attend to the corporation's affairs.

The Additional Paid-in Capital account normally arises in the accounting records when

Start-up and organization costs for a corporation that is to operate a retail store would include the costs of

Match each definition with the correct term below. -Statement of stockholders' equity

The sale of shares in a corporation by one stockholder to another does not affect the total capital of the corporation.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 12: Stockholders Equity

A corporation's residual equity is its

The company issued 8,000 shares of stock in exchange for equipment that had a fair market value of $320,000. The entry to record transaction 3 would be:

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

No entry is required on the date of record for a cash dividend.

Holders of preferred stock normally do not have

Dividends in arrears are dividends on

The following information relates to the number of common shares of the Montgomery Corporation: Calculate the number of outstanding shares from the information given.Show your calculations.

A disadvantage of the corporate form of business is

How is it possible for a corporation to have more shares issued than it has outstanding?

Use the following information to answer the question below. The following transactions involving Culbert Corporation occurred during the year: The entry to record the April 1 transaction would be:

Prepare the entries in journal form necessary to record the following stock transactions of Fitzgerald Corporation.These transactions represent all treasury stock transactions entered into by the company.(Omit explanations.)

An advantage of the corporate form is that the board cannot hire professional managers to attend to the corporation's affairs.

The Additional Paid-in Capital account normally arises in the accounting records when

Start-up and organization costs for a corporation that is to operate a retail store would include the costs of

Match each definition with the correct term below. -Statement of stockholders' equity

The sale of shares in a corporation by one stockholder to another does not affect the total capital of the corporation.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters