Question 1

The amount of income earned per share of a company's outstanding common stock is known as:

Accepted Answer

A)  Restricted retained earnings per share. 
B)  Earnings per share. 
C)  Continuing operations per share. 
D)  Dividends per share. 
E)  Book value per share. 
A)  Restricted retained earnings per share. 
B)  Earnings per share. 
C)  Continuing operations per share. 
D)  Dividends per share. 
E)  Book value per share.

Question 2

Alto Company issued 7% preferred stock with a $100 par value.This means that:

Accepted Answer

A)  Preferred shareholders have a guaranteed dividend. 
B)  The amount of the potential dividend is $7 per year per preferred share. 
C)  Preferred shareholders are entitled to 7% of the annual income. 
D)  The market price per share will approximate $100 per share. 
E)  Only 7% of the total paid-in capital can be preferred stock. 
A)  Preferred shareholders have a guaranteed dividend. 
B)  The amount of the potential dividend is $7 per year per preferred share. 
C)  Preferred shareholders are entitled to 7% of the annual income. 
D)  The market price per share will approximate $100 per share. 
E)  Only 7% of the total paid-in capital can be preferred stock.

Question 3

________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

Accepted Answer

Book value

Question 4

A company has $2,400,000 in stockholders' equity that includes 500 shares of $50 par value noncallable preferred stock outstanding and 250,000 shares of common stock outstanding.Calculate the book value per (1)preferred share,and (2)common share.

Accepted Answer

(1)Book value/preferred share:

Question 5

The following data were reported by a corporation:
$$\begin{array} { l c } 
\text { Authorized shares } & 20,000 \
\text { Issued shares } & 15,000 \
\text { Treasury shares } & 3,000
\end{array}$$
The number of outstanding shares is:

Accepted Answer

A)  12,000. 
B)  15,000. 
C)  17,000. 
D)  20,000. 
E)  23,000. 
A)  12,000. 
B)  15,000. 
C)  17,000. 
D)  20,000. 
E)  23,000.

Question 6

Par value of a stock refers to the:

Accepted Answer

A)  Issue price of the stock. 
B)  Value assigned per share by the corporate charter. 
C)  Market value of the stock on the date of the financial statements. 
D)  Maximum selling price of the stock. 
E)  Dividend value of the stock. 
A)  Issue price of the stock. 
B)  Value assigned per share by the corporate charter. 
C)  Market value of the stock on the date of the financial statements. 
D)  Maximum selling price of the stock. 
E)  Dividend value of the stock.

Question 7

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Accepted Answer

A) True 
 B)False

Question 8

A premium on common stock:

Accepted Answer

A)  Occurs when a corporation sells its stock for more than par or stated value. 
B)  Is the difference between par value and issue price when the amount paid is below par. 
C)  Represents profit from issuing stock. 
D)  Represents capital gain on sale of stock. 
E)  Is prohibited in most states. 
A)  Occurs when a corporation sells its stock for more than par or stated value. 
B)  Is the difference between par value and issue price when the amount paid is below par. 
C)  Represents profit from issuing stock. 
D)  Represents capital gain on sale of stock. 
E)  Is prohibited in most states.

Question 9

Common shareholders always share equally with all other shareholders in dividends.

Accepted Answer

A) True 
 B)False

Question 10

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Accepted Answer

A) True 
 B)False

Question 11

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Accepted Answer

A) True 
 B)False

Question 12

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

Accepted Answer

A)  Dividend payout ratio. 
B)  Dividend yield. 
C)  Price-earnings ratio. 
D)  Current yield. 
E)  Earnings per share. 
A)  Dividend payout ratio. 
B)  Dividend yield. 
C)  Price-earnings ratio. 
D)  Current yield. 
E)  Earnings per share.

Question 13

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 14

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Accepted Answer

A)  Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500. 
B)  Debit Common Dividends Payable $104,500; credit Cash $104,500. 
C)  Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100. 
D)  Debit Common Dividends Payable $100,100; credit Cash $100,100. 
E)  Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000. 
A)  Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500. 
B)  Debit Common Dividends Payable $104,500; credit Cash $104,500. 
C)  Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100. 
D)  Debit Common Dividends Payable $100,100; credit Cash $100,100. 
E)  Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000.

Question 15

A company paid a cash dividend of $0.88 per share during the current year,and reported 18,000 shares of common stock issued,and 2,000 common shares in treasury stock during the current year.The year-end market price per share was $27.50.Calculate the following: (1)total amount of cash dividends paid to common shareholders,and (2)dividend yield.

Accepted Answer

(1)$0.88 * (18,000 shares - 2,

Question 16

________ is the amount of income earned per share of a company's outstanding common stock.

Accepted Answer

The answer of ________ is the amount of income earned...

Question 17

Stocks with a price-earnings ratio less than 20 to 25 are likely to be overpriced.

Accepted Answer

A) True 
 B)False

Question 18

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration,the dividends account is closed to Retained Earnings at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Book value per share reflects the value per share if a company is liquidated at balance sheet amounts.

Accepted Answer

A) True 
 B)False

The amount of income earned per share of a company's outstanding common stock is known as:

Alto Company issued 7% preferred stock with a $100 par value.This means that:

________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

A company has $2,400,000 in stockholders' equity that includes 500 shares of $50 par value noncallable preferred stock outstanding and 250,000 shares of common stock outstanding.Calculate the book value per (1)preferred share,and (2)common share.

The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of outstanding shares is:

Par value of a stock refers to the:

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

A premium on common stock:

Common shareholders always share equally with all other shareholders in dividends.

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

________ is the amount of income earned per share of a company's outstanding common stock.

Stocks with a price-earnings ratio less than 20 to 25 are likely to be overpriced.

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration,the dividends account is closed to Retained Earnings at the end of the accounting period.

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:

Book value per share reflects the value per share if a company is liquidated at balance sheet amounts.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 11: Corporate Reporting and Analysis

The amount of income earned per share of a company's outstanding common stock is known as:

Alto Company issued 7% preferred stock with a $100 par value.This means that:

________ is the stockholders' equity applicable to common shares divided by the number of common shares outstanding.

A company has $2,400,000 in stockholders' equity that includes 500 shares of $50 par value noncallable preferred stock outstanding and 250,000 shares of common stock outstanding.Calculate the book value per (1)preferred share,and (2)common share.

The following data were reported by a corporation: Authorized shares 20,000 Issued shares 15,000 Treasury shares 3,000 The number of outstanding shares is:

Par value of a stock refers to the:

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

A premium on common stock:

Common shareholders always share equally with all other shareholders in dividends.

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

The amount of annual cash dividends distributed to common shareholders relative to the common stock's market value is the:

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

________ is the amount of income earned per share of a company's outstanding common stock.

Stocks with a price-earnings ratio less than 20 to 25 are likely to be overpriced.

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration,the dividends account is closed to Retained Earnings at the end of the accounting period.

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:

Book value per share reflects the value per share if a company is liquidated at balance sheet amounts.

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters