Question 1

Shares of outstanding stock always equal the number of shares of authorized stock.

Accepted Answer

A) True 
 B)False

Question 2

If preferred dividends are limited to the stated rate of dividend,the preferred stock is:

Accepted Answer

A) non-cumulative. 
B) cumulative. 
C) participating. 
D) nonparticipating. 
A) non-cumulative. 
B) cumulative. 
C) participating. 
D) nonparticipating.

Question 3

Rhubarb Corporation's outstanding stock is 100 shares of $100,11% cumulative nonparticipating preferred stock and 2,000 shares of $12 par value common stock.Rhubarb paid $1,600 cash dividends during the year.Common stockholders received:

Accepted Answer

A) $0. 
B) $500. 
C) $2,500. 
D) $1,100. 
A) $0. 
B) $500. 
C) $2,500. 
D) $1,100.

Question 4

Organization costs are:

Accepted Answer

A) part of the company's start-up and are listed as expenses. 
B) listed as an intangible asset on the balance sheet. 
C) a current asset on the balance sheet. 
D) another expense on the income statement. 
A) part of the company's start-up and are listed as expenses. 
B) listed as an intangible asset on the balance sheet. 
C) a current asset on the balance sheet. 
D) another expense on the income statement.

Question 5

Prepare the journal entries for Mayhem Manufacturing:
July 21 Issued 6,000 shares of $10 par common stock for $65,000.
July 29 Issued 3,000 shares of 7%,$30 par preferred stock for equipment with a fair market value of $93,000.

Accepted Answer

@#IMG-DLM&_TB5851_00

Question 6

The entry to record selling 300 shares of no-par common stock with a stated value of $60 for $70 would be to:

Accepted Answer

A) debit Cash $21,000; credit Common Stock $21,000. 
B) debit Cash $18,000; credit Common Stock $18,000. 
C) debit Cash $21,000; credit Common Stock $18,000; debit Paid-in Capital in Excess of Par Value-Common $3,000. 
D) debit Cash $21,000; credit Common Stock $18,000; credit Paid-in Capital in Excess of Stated Value-Common $3,000. 
A) debit Cash $21,000; credit Common Stock $21,000. 
B) debit Cash $18,000; credit Common Stock $18,000. 
C) debit Cash $21,000; credit Common Stock $18,000; debit Paid-in Capital in Excess of Par Value-Common $3,000. 
D) debit Cash $21,000; credit Common Stock $18,000; credit Paid-in Capital in Excess of Stated Value-Common $3,000.

Question 7

Issued stock is:

Accepted Answer

A) authorized shares of stock that can be sold. 
B) stock only sold to another company. 
C) shares sold and in stockholders' possession. 
D) stock sold to stockholders. 
A) authorized shares of stock that can be sold. 
B) stock only sold to another company. 
C) shares sold and in stockholders' possession. 
D) stock sold to stockholders.

Question 8

Par value is equal to:

Accepted Answer

A) market value of the stock. 
B) the amount stated in the charter or legal capital. 
C) retained earnings. 
D) the initial price at which the stock is sold. 
A) market value of the stock. 
B) the amount stated in the charter or legal capital. 
C) retained earnings. 
D) the initial price at which the stock is sold.

Question 9

Identify the account types used in recording transactions related to a stock subscription plan: Subscriptions Receivable-Common Stock; Common Stock Subscribed,Paid-In Capital in Excess of Par,Common Stock,Cash.Also list the financial statement where the accounts are found.

Accepted Answer

The answer of Identify the account types used in recording...

Question 10

Birch Company issued 200 shares of common stock with a par value of $12 per share in exchange for equipment with a fair market value of $3,000.Record the journal entry for the stock issuance.

Accepted Answer

The answer of Birch Company issued 200 shares of common...

Question 11

Stockholders' investment appears in:

Accepted Answer

A) Paid-in Capital. 
B) Owner's Equity. 
C) Retained Earnings. 
D) Cash. 
A) Paid-in Capital. 
B) Owner's Equity. 
C) Retained Earnings. 
D) Cash.

Question 12

A share of stock may be sold at any given time according to the stock's:

Accepted Answer

A) stated value. 
B) book value. 
C) market value. 
D) par value. 
A) stated value. 
B) book value. 
C) market value. 
D) par value.

Question 13

Characteristics of a corporation include:

Accepted Answer

A) stockholders having unlimited liability. 
B) direct management by the stockholders. 
C) stockholders having limited liability. 
D) choosing a board of directors. 
A) stockholders having unlimited liability. 
B) direct management by the stockholders. 
C) stockholders having limited liability. 
D) choosing a board of directors.

Question 14

Washington Corporation issued 4,000 shares of its $20 par value common stock for $23 per share.The entry to record the issuance would include a:

Accepted Answer

A) debit to Cash for $80,000. 
B) credit to Common Stock for $12,000. 
C) credit to Common Stock for $80,000. 
D) debit to Paid-in Capital in Excess of Par Value for $12,000. 
A) debit to Cash for $80,000. 
B) credit to Common Stock for $12,000. 
C) credit to Common Stock for $80,000. 
D) debit to Paid-in Capital in Excess of Par Value for $12,000.

Question 15

Stockholders pay federal income tax on their stock dividends.

Accepted Answer

A) True 
 B)False

Question 16

Antiques.com Corporation's outstanding stock is 75 shares of $60,8% cumulative nonparticipating preferred stock and 2,000 shares of $10 par value common stock.Antiques paid $2,400 cash dividends during the year.Common stockholders received:

Accepted Answer

A) $2,400. 
B) $360. 
C) $2,040. 
D) $0. 
A) $2,400. 
B) $360. 
C) $2,040. 
D) $0.

Question 17

No entry was recorded for the exchange of stock for land.This error would cause:

Accepted Answer

A) the period end stockholders' equity to be understated. 
B) the period end stockholders' equity to be overstated. 
C) the period's net income to be understated. 
D) Both A and C are correct. 
A) the period end stockholders' equity to be understated. 
B) the period end stockholders' equity to be overstated. 
C) the period's net income to be understated. 
D) Both A and C are correct.

Question 18

The TM Stockholders' Equity section includes the following: $\begin{array} { | l | r | } 
\hline \text { Preferred Stock } & \$ 3,800 \
\hline \text { Common Stock } & 7,700 \
\hline \text { Paid-in Capital in Excess of Par-Preferred } & 400 \
\hline \text { Paid-in Capital in Excess of Par-Common } & 2,250 \
\hline \text { Retained Earnings } & 6,000 \
\hline
\end{array}$ What was the total amount common stock was sold for?

Accepted Answer

A) $7,700 
B) $13,700 
C) $11,500 
D) $9,950 
A) $7,700 
B) $13,700 
C) $11,500 
D) $9,950

Question 19

Prepare the journal entries for Mayhem Manufacturing:
June 10 Incurred organization costs totaling $4,200
June 14 Issued 9,000 shares of $10 par value common stock for $110,000
June 22 Issued 3,500 shares of 7%,$30 par value preferred stock for $115,000.

Accepted Answer

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Question 20

Common Stock Subscribed is:

Accepted Answer

A) shown as an equity account below Issued Common Stock. 
B) contra-asset account. 
C) a receivables account. 
D) shown on the income statement as a revenue. 
A) shown as an equity account below Issued Common Stock. 
B) contra-asset account. 
C) a receivables account. 
D) shown on the income statement as a revenue.

Exam 18: Corporations: Organizations and Stock

Shares of outstanding stock always equal the number of shares of authorized stock.

If preferred dividends are limited to the stated rate of dividend,the preferred stock is:

Rhubarb Corporation's outstanding stock is 100 shares of $100,11% cumulative nonparticipating preferred stock and 2,000 shares of $12 par value common stock.Rhubarb paid $1,600 cash dividends during the year.Common stockholders received:

Organization costs are:

Prepare the journal entries for Mayhem Manufacturing: July 21 Issued 6,000 shares of $10 par common stock for $65,000. July 29 Issued 3,000 shares of 7%,$30 par preferred stock for equipment with a fair market value of $93,000.

The entry to record selling 300 shares of no-par common stock with a stated value of $60 for $70 would be to:

Issued stock is:

Par value is equal to:

Identify the account types used in recording transactions related to a stock subscription plan: Subscriptions Receivable-Common Stock; Common Stock Subscribed,Paid-In Capital in Excess of Par,Common Stock,Cash.Also list the financial statement where the accounts are found.

Birch Company issued 200 shares of common stock with a par value of $12 per share in exchange for equipment with a fair market value of $3,000.Record the journal entry for the stock issuance.

Stockholders' investment appears in:

A share of stock may be sold at any given time according to the stock's:

Characteristics of a corporation include:

Washington Corporation issued 4,000 shares of its $20 par value common stock for $23 per share.The entry to record the issuance would include a:

Stockholders pay federal income tax on their stock dividends.

Antiques.com Corporation's outstanding stock is 75 shares of $60,8% cumulative nonparticipating preferred stock and 2,000 shares of $10 par value common stock.Antiques paid $2,400 cash dividends during the year.Common stockholders received:

No entry was recorded for the exchange of stock for land.This error would cause:

The TM Stockholders' Equity section includes the following: Preferred Stock \ 3,800 Common Stock 7,700 Paid-in Capital in Excess of Par-Preferred 400 Paid-in Capital in Excess of Par-Common 2,250 Retained Earnings 6,000 What was the total amount common stock was sold for?

Prepare the journal entries for Mayhem Manufacturing: June 10 Incurred organization costs totaling $4,200 June 14 Issued 9,000 shares of $10 par value common stock for $110,000 June 22 Issued 3,500 shares of 7%,$30 par value preferred stock for $115,000.

Common Stock Subscribed is:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, plant, equipment, and Intangible Assets

Partnership

Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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