Question 1

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Accepted Answer

A) True 
 B)False

Question 2

Nexis Corp.issues 1,000 shares of $15 par value common stock at $22 per share.When the transaction is recorded,credits are made to:

Accepted Answer

A) Common Stock,$15,000,and Paid-In Capital in Excess of Par,$7,000 
B) Common Stock,$22,000,and Retained Earnings,$15,000 
C) Common Stock,$7,000,and Paid-In Capital in Excess of Stated Value,$15,000 
D) Common Stock,$22,000 
A) Common Stock,$15,000,and Paid-In Capital in Excess of Par,$7,000 
B) Common Stock,$22,000,and Retained Earnings,$15,000 
C) Common Stock,$7,000,and Paid-In Capital in Excess of Stated Value,$15,000 
D) Common Stock,$22,000

Question 3

Which of the following is not classified as paid-in capital on the balance sheet?

Accepted Answer

A) common stock 
B) common stock distributable 
C) excess of issue price over par 
D) treasury stock 
A) common stock 
B) common stock distributable 
C) excess of issue price over par 
D) treasury stock

Question 4

Par value

Accepted Answer

A) is the monetary value assigned per share in the corporate charter 
B) represents what a share of stock is worth 
C) represents the original selling price for a share of stock 
D) is established for a share of stock after it is issued 
A) is the monetary value assigned per share in the corporate charter 
B) represents what a share of stock is worth 
C) represents the original selling price for a share of stock 
D) is established for a share of stock after it is issued

Question 5

If common stock is issued for an amount greater than par value,the excess should be credited to

Accepted Answer

A) Retained Earnings 
B) Cash 
C) Legal Capital 
D) Paid-In Capital in Excess of Par 
A) Retained Earnings 
B) Cash 
C) Legal Capital 
D) Paid-In Capital in Excess of Par

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share.The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to

Accepted Answer

A) Preferred Stock for $750,000 
B) Preferred Stock for $500,000 and Paid­In Capital in Excess of Par-Preferred Stock for $250,000 
C) Preferred Stock for $500,000 and Retained Earnings for $250,000 
D) Paid-In Capital from Preferred Stock for $750,000 
A) Preferred Stock for $750,000 
B) Preferred Stock for $500,000 and Paid­In Capital in Excess of Par-Preferred Stock for $250,000 
C) Preferred Stock for $500,000 and Retained Earnings for $250,000 
D) Paid-In Capital from Preferred Stock for $750,000

Question 8

The state charter allows a corporation to issue only a certain number of shares of each class of stock.This amount of stock is called

Accepted Answer

A) treasury stock 
B) issued stock 
C) outstanding stock 
D) authorized stock 
A) treasury stock 
B) issued stock 
C) outstanding stock 
D) authorized stock

Question 9

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Accepted Answer

A) True 
 B)False

Question 10

Twenty percent of all businesses in the United States are corporations,and they account for 80% of the total business dollars generated.

Accepted Answer

A) True 
 B)False

Question 11

One of the main disadvantages of the corporate form is the

Accepted Answer

A) professional management 
B) double taxation of dividends 
C) charter 
D) requirement to stock 
A) professional management 
B) double taxation of dividends 
C) charter 
D) requirement to stock

Question 12

When a corporation completes a 3-for-1 stock split

Accepted Answer

A) the ownership interest of current stockholders is decreased 
B) the market price per share of the stock is decreased 
C) the par value per share is decreased 
D) the market price per share of the stock and the par value per share is decreased 
A) the ownership interest of current stockholders is decreased 
B) the market price per share of the stock is decreased 
C) the par value per share is decreased 
D) the market price per share of the stock and the par value per share is decreased

Question 13

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

Accepted Answer

A) $7.00 
B) $112.00 
C) $37.50 
D) $600.00 
A) $7.00 
B) $112.00 
C) $37.50 
D) $600.00

Question 14

When a stock dividend is declared,which of the following accounts is credited?

Accepted Answer

A) Common Sock 
B) Dividend Payable 
C) Stock Dividends Distributable 
D) Retained Earnings 
A) Common Sock 
B) Dividend Payable 
C) Stock Dividends Distributable 
D) Retained Earnings

Question 15

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 16

Under the corporate form of business organization,

Accepted Answer

A) ownership rights are easily transferred 
B) a stockholder is personally liable for the debts of the corporation 
C) stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation 
D) stockholders wishing to sell their corporate shares must get the approval of other stockholders 
A) ownership rights are easily transferred 
B) a stockholder is personally liable for the debts of the corporation 
C) stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation 
D) stockholders wishing to sell their corporate shares must get the approval of other stockholders

Question 17

A prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made.

Accepted Answer

A) True 
 B)False

Question 18

Those most responsible for the major policy decisions of a corporation are the

Accepted Answer

A) management 
B) board of directors 
C) employees 
D) stockholders 
A) management 
B) board of directors 
C) employees 
D) stockholders

Question 19

A large retained earnings account means that there is cash available to pay dividends.

Accepted Answer

A) True 
 B)False

Question 20

When Wisconsin Corporation was formed on January 1,the corporate charter provided for 100,000 share of $10 par value common stock.The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 8,500 shares of stock at a price of $16 per share. The entry to record the above transaction would include a

Accepted Answer

A) debit to Cash for $85,000 
B) credit to Common Stock for $136,000 
C) credit to Paid in Capital in Excess of Par for $51,000 
D) debit to Common Stock for $85,000 
A) debit to Cash for $85,000 
B) credit to Common Stock for $136,000 
C) credit to Paid in Capital in Excess of Par for $51,000 
D) debit to Common Stock for $85,000

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Nexis Corp.issues 1,000 shares of $15 par value common stock at $22 per share.When the transaction is recorded,credits are made to:

Which of the following is not classified as paid-in capital on the balance sheet?

Par value

If common stock is issued for an amount greater than par value,the excess should be credited to

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

The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share.The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to

The state charter allows a corporation to issue only a certain number of shares of each class of stock.This amount of stock is called

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Twenty percent of all businesses in the United States are corporations,and they account for 80% of the total business dollars generated.

One of the main disadvantages of the corporate form is the

When a corporation completes a 3-for-1 stock split

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

When a stock dividend is declared,which of the following accounts is credited?

The primary purpose of a stock split is to

Under the corporate form of business organization,

A prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made.

Those most responsible for the major policy decisions of a corporation are the

A large retained earnings account means that there is cash available to pay dividends.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Corporations: Organization,stock Transactions,and Dividends

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Nexis Corp.issues 1,000 shares of $15 par value common stock at $22 per share.When the transaction is recorded,credits are made to:

Which of the following is not classified as paid-in capital on the balance sheet?

Par value

If common stock is issued for an amount greater than par value,the excess should be credited to

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

The Sneed Corporation issues 10,000 shares of $50 par preferred stock for cash at $75 per share.The entry to record the transaction will consist of a debit to Cash for $750,000 and a credit or credits to

The state charter allows a corporation to issue only a certain number of shares of each class of stock.This amount of stock is called

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Twenty percent of all businesses in the United States are corporations,and they account for 80% of the total business dollars generated.

One of the main disadvantages of the corporate form is the

When a corporation completes a 3-for-1 stock split

A corporation has 50,000 shares of $28 par stock outstanding that has a current market value of $150 per share.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

When a stock dividend is declared,which of the following accounts is credited?

The primary purpose of a stock split is to

Under the corporate form of business organization,

A prior period adjustment should be reported as an adjustment to the retained earnings balance at the beginning of the period in which the adjustment was made.

Those most responsible for the major policy decisions of a corporation are the

A large retained earnings account means that there is cash available to pay dividends.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters