Question 1

Deferred tax can either be an asset or a liability.

Accepted Answer

A) True 
 B)False

Question 2

Notebook Company had the following transactions in 2013, its first year of operations.
• Issued 2,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $50.00 Per share.
• Issued 100 shares of $100 par value preferred stock. Shares were issued at par.
• Earned net income of $95,000.
• Paid dividends of $5,000.
-
At the end of 2013, how much was the total Stockholders' equity?

Accepted Answer

A)  $200,000 
B)  $110,000 
C)  $90,000 
D)  $100,000 
A)  $200,000 
B)  $110,000 
C)  $90,000 
D)  $100,000

Question 3

A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the second of three year-end closing entries.
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Accepted Answer

This question is no

Question 4

Which of the following is the amount guaranteed to preferred shareholders in the event the company goes out of business?

Accepted Answer

A)  Book value 
B)  Market value 
C)  Liquidation value 
D)  Amortized value 
A)  Book value 
B)  Market value 
C)  Liquidation value 
D)  Amortized value

Question 5

Hot Tamale Company had $120,000 of Revenues and $125,000 of Expenses. No dividends were paid. Please provide the first of the year-end closing entries.
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\hline & & \
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\end{array}$$

Accepted Answer

This question is no

Question 6

If a company's share prices go up from the original issue price, the company will record income for the amount of the gain.

Accepted Answer

A) True 
 B)False

Question 7

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000.
How is the dividend allocated between preferred and common stockholders?

Accepted Answer

A)  The dividend is allocated $5,000 to preferred shareholders and $115,000 to common shareholders. 
B)  The dividend is allocated $50,000 to preferred shareholders and $70,000 to common shareholders. 
C)  The dividend is allocated $60,000 to preferred shareholders and $60,000 to common shareholders. 
D)  The dividend is allocated $12,000 to preferred shareholders and $108,000 to common shareholders. 
A)  The dividend is allocated $5,000 to preferred shareholders and $115,000 to common shareholders. 
B)  The dividend is allocated $50,000 to preferred shareholders and $70,000 to common shareholders. 
C)  The dividend is allocated $60,000 to preferred shareholders and $60,000 to common shareholders. 
D)  The dividend is allocated $12,000 to preferred shareholders and $108,000 to common shareholders.

Question 8

Which of the following describes retained earnings?

Accepted Answer

A)  Internally generated capital that results from profitable business transactions 
B)  Externally generated capital that is contributed by shareholders 
C)  Externally generated capital that is raised from banks and other creditors 
D)  Internally generated capital that results from employees' contributions 
A)  Internally generated capital that results from profitable business transactions 
B)  Externally generated capital that is contributed by shareholders 
C)  Externally generated capital that is raised from banks and other creditors 
D)  Internally generated capital that results from employees' contributions

Question 9

What authority determines how many shares of stock a corporation may issue?

Accepted Answer

A)  A vote by the board of directors 
B)  The rules of GAAP 
C)  Regulations of the Securities and Exchange Commission 
D)  The government laws in the state where the business is incorporated 
A)  A vote by the board of directors 
B)  The rules of GAAP 
C)  Regulations of the Securities and Exchange Commission 
D)  The government laws in the state where the business is incorporated

Question 10

When a company has issued both preferred and common stock, the preferred stockholders are allocated their dividends first.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following characteristics is an advantage of the corporate form of business?

Accepted Answer

A)  Higher degree of government regulation 
B)  The potential to raise large amounts of capital 
C)  Separation of ownership and management 
D)  Double taxation 
A)  Higher degree of government regulation 
B)  The potential to raise large amounts of capital 
C)  Separation of ownership and management 
D)  Double taxation

Question 12

All forms and classes of stock carry voting rights.

Accepted Answer

A) True 
 B)False

Question 13

Reed Company reports the following information for the year 2013:
$$\begin{array} { | l | r | } 
\hline \text { Net income } & \$ 46,000 \
\hline \text { Preferred dividends } & 12,000 \
\hline \text { Common equity, Jan 1 } & 800,000 \
\hline \text { Common equity, Dec 31 } & 900,000 \
\hline
\end{array}$$
Please calculate the rate of return on common stockholders' equity. Please round to 3 decimal places.

Accepted Answer

A)  0.054 
B)  0.040 
C)  0.043 
D)  0.014 
A)  0.054 
B)  0.040 
C)  0.043 
D)  0.014

Question 14

Which of the following is an advantage of preferred stock?

Accepted Answer

A)  Preferred shareholders generally receive a fixed amount of dividends before common stockholders do. 
B)  Preferred shareholders are guaranteed that they will not take a loss on their investment. 
C)  Preferred shareholders have higher voting rights than common shareholders. 
D)  Preferred shareholders may sell their shares for a price higher than that of common stock. 
A)  Preferred shareholders generally receive a fixed amount of dividends before common stockholders do. 
B)  Preferred shareholders are guaranteed that they will not take a loss on their investment. 
C)  Preferred shareholders have higher voting rights than common shareholders. 
D)  Preferred shareholders may sell their shares for a price higher than that of common stock.

Question 15

The journal entry to record the declaration of a dividend includes a credit to Cash.

Accepted Answer

A) True 
 B)False

Question 16

No gains or losses are ever recorded by a company when they sell or issue shares of their own stock.

Accepted Answer

A) True 
 B)False

Question 17

When a company sells stock for more than the par value, it will record a gain on sale for the amount in excess of par.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following corporate characteristics is a disadvantage of the corporate form of business?

Accepted Answer

A)  Limited liability 
B)  Double taxation 
C)  No mutual agency 
D)  Transferability of ownership 
A)  Limited liability 
B)  Double taxation 
C)  No mutual agency 
D)  Transferability of ownership

Question 19

Notebook Company had the following transactions in 2013, its first year of operations.
• Issued 2,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $50.00
Per share.
• Issued 100 shares of $100 par value preferred stock. Shares were issued at par.
• Earned net income of $95,000.
• Paid dividends of $5,000.
-
At the end of 2013, how much was the total Paid-in capital?

Accepted Answer

A)  $190,000 
B)  $110,000 
C)  $90,000 
D)  $200,000 
A)  $190,000 
B)  $110,000 
C)  $90,000 
D)  $200,000

Question 20

A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the first of three year-end closing entries.
 $$\begin{array} { | l | l | l | } 
\hline \quad\quad\quad\quad\quad& \quad\quad&\quad\quad \
\hline & & \
\hline
\end{array}$$

Accepted Answer

This question is no

Deferred tax can either be an asset or a liability.

A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the second of three year-end closing entries.

Which of the following is the amount guaranteed to preferred shareholders in the event the company goes out of business?

Hot Tamale Company had $120,000 of Revenues and $125,000 of Expenses. No dividends were paid. Please provide the first of the year-end closing entries.

If a company's share prices go up from the original issue price, the company will record income for the amount of the gain.

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000. How is the dividend allocated between preferred and common stockholders?

Which of the following describes retained earnings?

What authority determines how many shares of stock a corporation may issue?

When a company has issued both preferred and common stock, the preferred stockholders are allocated their dividends first.

Which of the following characteristics is an advantage of the corporate form of business?

All forms and classes of stock carry voting rights.

Reed Company reports the following information for the year 2013: Net income \ 46,000 Preferred dividends 12,000 Common equity, Jan 1 800,000 Common equity, Dec 31 900,000 Please calculate the rate of return on common stockholders' equity. Please round to 3 decimal places.

Which of the following is an advantage of preferred stock?

The journal entry to record the declaration of a dividend includes a credit to Cash.

No gains or losses are ever recorded by a company when they sell or issue shares of their own stock.

When a company sells stock for more than the par value, it will record a gain on sale for the amount in excess of par.

Which of the following corporate characteristics is a disadvantage of the corporate form of business?

A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the first of three year-end closing entries.

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters

Exam 12: Corporations: Paid-In Capital and the Balance Sheet

Deferred tax can either be an asset or a liability.

A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the second of three year-end closing entries.

Which of the following is the amount guaranteed to preferred shareholders in the event the company goes out of business?

Hot Tamale Company had $120,000 of Revenues and $125,000 of Expenses. No dividends were paid. Please provide the first of the year-end closing entries.

If a company's share prices go up from the original issue price, the company will record income for the amount of the gain.

A corporation has 10,000 shares of 10%, $50 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $120,000. How is the dividend allocated between preferred and common stockholders?

Which of the following describes retained earnings?

What authority determines how many shares of stock a corporation may issue?

When a company has issued both preferred and common stock, the preferred stockholders are allocated their dividends first.

Which of the following characteristics is an advantage of the corporate form of business?

All forms and classes of stock carry voting rights.

Reed Company reports the following information for the year 2013: Net income \ 46,000 Preferred dividends 12,000 Common equity, Jan 1 800,000 Common equity, Dec 31 900,000 Please calculate the rate of return on common stockholders' equity. Please round to 3 decimal places.

Which of the following is an advantage of preferred stock?

The journal entry to record the declaration of a dividend includes a credit to Cash.

No gains or losses are ever recorded by a company when they sell or issue shares of their own stock.

When a company sells stock for more than the par value, it will record a gain on sale for the amount in excess of par.

Which of the following corporate characteristics is a disadvantage of the corporate form of business?

A company had $90,000 of Sales revenue and $55,000 of Expenses. Please provide the first of three year-end closing entries.

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters