Question 1

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

Accepted Answer

A) Participating preferred stock. 
B) Callable preferred stock. 
C) Cumulative preferred stock. 
D) Convertible preferred stock. 
E) Noncumulative preferred stock. 
A) Participating preferred stock. 
B) Callable preferred stock. 
C) Cumulative preferred stock. 
D) Convertible preferred stock. 
E) Noncumulative preferred stock.

Question 2

A stock split increases total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 3

A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

Accepted Answer

A) A debit to Common Stock for $12,000. 
B) A debit to Land for $12,000. 
C) A credit to Land for $12,000. 
D) A credit to Paid-in Capital in Excess of Par Value,Common Stock for $72,000. 
E) A credit to Common Stock for $84,000. 
A) A debit to Common Stock for $12,000. 
B) A debit to Land for $12,000. 
C) A credit to Land for $12,000. 
D) A credit to Paid-in Capital in Excess of Par Value,Common Stock for $72,000. 
E) A credit to Common Stock for $84,000.

Question 4

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Accepted Answer

A) True 
 B)False

Question 5

Stock not assigned a value per share by the corporate charter,allowing it to be issued at any price,is called ________.

Accepted Answer

The answer of Stock not assigned a value per share...

Question 6

A company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

Accepted Answer

A) on the Year 1 statement of retained earnings. 
B) on the Year 1 income statement. 
C) on the Year 2 statement of retained earnings. 
D) on the Year 2 income statement. 
E) accounted for with a cumulative "catch-up" adjustment in Year 2. 
A) on the Year 1 statement of retained earnings. 
B) on the Year 1 income statement. 
C) on the Year 2 statement of retained earnings. 
D) on the Year 2 income statement. 
E) accounted for with a cumulative "catch-up" adjustment in Year 2.

Question 7

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

Accepted Answer

A) True 
 B)False

Question 8

A debit balance in retained earnings is referred to as a retained earnings deficit.

Accepted Answer

A) True 
 B)False

Question 9

Common stock always carries a preference for receiving dividends over preferred stock.

Accepted Answer

A) True 
 B)False

Question 10

A company has net income of $90,000; its weighted-average common shares outstanding are 18,000.Its dividend per share is $0.45,its market price per share is $88,and its book value per share is $76.Its price-earnings ratio equals:

Accepted Answer

A) 9.0. 
B) 17.6. 
C) 12.5. 
D) 15.2. 
E) 16.9. 
A) 9.0. 
B) 17.6. 
C) 12.5. 
D) 15.2. 
E) 16.9.

Question 11

The price-earnings ratio is calculated by dividing:

Accepted Answer

A) Market value per share by earnings per share. 
B) Earnings per share by par value per share. 
C) Dividends per share by earnings per share. 
D) Dividends per share by market value per share. 
E) Market value per share by dividends per share. 
A) Market value per share by earnings per share. 
B) Earnings per share by par value per share. 
C) Dividends per share by earnings per share. 
D) Dividends per share by market value per share. 
E) Market value per share by dividends per share.

Question 12

A registrar keeps stockholder records for dividend payments and stockholder meetings.

Accepted Answer

A) True 
 B)False

Question 13

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

Accepted Answer

Dividend yield is the ratio of annual ca

Question 14

Percy Corporation was formed on January 1.The corporate charter authorized 100,000 shares of $10 par value common stock.During the first month of operation,the corporation issued 400 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation.The entry to record this transaction would include:

Accepted Answer

A) A debit to Organization Expenses for $4,000. 
B) A debit to Organization Expenses for $5,000. 
C) A credit to Common Stock for $5,000. 
D) A credit to Paid-in Capital in Excess of Par Value,Common Stock for $5,000. 
E) A debit to Paid-in Capital in Excess of Par Value,Common Stock for $2,000. 
A) A debit to Organization Expenses for $4,000. 
B) A debit to Organization Expenses for $5,000. 
C) A credit to Common Stock for $5,000. 
D) A credit to Paid-in Capital in Excess of Par Value,Common Stock for $5,000. 
E) A debit to Paid-in Capital in Excess of Par Value,Common Stock for $2,000.

Question 15

A company has 50,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $1,470,000,and the par value per common share is $5.The book value per share is:

Accepted Answer

A) $4.75. 
B) $14.70. 
C) $10.00. 
D) $29.40. 
E) $47.50. 
A) $4.75. 
B) $14.70. 
C) $10.00. 
D) $29.40. 
E) $47.50.

Question 16

When the dividend rate on preferred stock is less than the rate of return earned on a corporation's assets,it is called:

Accepted Answer

A) Financial leverage. 
B) Discount on stock. 
C) Premium on stock. 
D) Preemptive right. 
E) Capital gain. 
A) Financial leverage. 
B) Discount on stock. 
C) Premium on stock. 
D) Preemptive right. 
E) Capital gain.

Question 17

Dividend yield is computed by dividing earnings per share by the market value per share.

Accepted Answer

A) True 
 B)False

Question 18

Corporations may buy back their own stock for any of the following reasons except to:

Accepted Answer

A) Avoid a take-over. 
B) Have shares available for a merger or acquisition. 
C) Have shares available for employee compensation. 
D) Maintain market value for the company stock. 
E) Allow management to assume the voting rights. 
A) Avoid a take-over. 
B) Have shares available for a merger or acquisition. 
C) Have shares available for employee compensation. 
D) Maintain market value for the company stock. 
E) Allow management to assume the voting rights.

Question 19

Given the following information about a corporation's current year activities,compute the retained earnings for the current year.

Accepted Answer

Retained Earnings =

Question 20

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the amount stated on the preferred stock.

Accepted Answer

A) True 
 B)False

Exam 11: Corporate Reporting and Analysis

Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:

A stock split increases total stockholders' equity.

A corporation issued 6,000 shares of its $2 par value common stock in exchange for land that has a market value of $84,000.The entry to record this transaction would include:

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Stock not assigned a value per share by the corporate charter,allowing it to be issued at any price,is called ________.

A company made an error in calculating and reporting amortization expense in Year 1.The error was discovered in Year 2.The item should be reported as a prior period adjustment:

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

A debit balance in retained earnings is referred to as a retained earnings deficit.

Common stock always carries a preference for receiving dividends over preferred stock.

A company has net income of $90,000; its weighted-average common shares outstanding are 18,000.Its dividend per share is $0.45,its market price per share is $88,and its book value per share is $76.Its price-earnings ratio equals:

The price-earnings ratio is calculated by dividing:

A registrar keeps stockholder records for dividend payments and stockholder meetings.

Explain how to compute dividend yield and discuss how it is used in analysis of a company's financial condition.

A company has 50,000 shares of common stock outstanding.The stockholders' equity applicable to common shares is $1,470,000,and the par value per common share is $5.The book value per share is:

When the dividend rate on preferred stock is less than the rate of return earned on a corporation's assets,it is called:

Dividend yield is computed by dividing earnings per share by the market value per share.

Corporations may buy back their own stock for any of the following reasons except to:

Given the following information about a corporation's current year activities,compute the retained earnings for the current year.

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the amount stated on the preferred stock.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

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