Question 1

Stockholders' equity consists of which of the following?

Accepted Answer

A)  Long-term assets. 
B)  Paid-in capital and retained earnings. 
C)  Paid-in capital and par value. 
D)  Retained earnings and cash. 
E)  Premiums and discounts. 
A)  Long-term assets. 
B)  Paid-in capital and retained earnings. 
C)  Paid-in capital and par value. 
D)  Retained earnings and cash. 
E)  Premiums and discounts.

Question 2

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Accepted Answer

A)  $10,250. 
B)  $14,625. 
C)  $7,125. 
D)  $7,500. 
E)  $11,250. 
A)  $10,250. 
B)  $14,625. 
C)  $7,125. 
D)  $7,500. 
E)  $11,250.

Question 3

A corporation had stockholders' equity on January 1 as follows: Common Stock,$1 par value,1,500,000 shares authorized,600,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,100,000; Retained Earnings,$2,300,000.Prepare journal entries to record the following transactions:
 $$\begin{array} { | l | l | } 
\hline \text { Feb. 15 } & \begin{array} { l } 
\text { The board of directors declared a } 10 \% \text { stock dividend to stockholders of record } \
\text { on }
\end{array} \
\hline & \begin{array} { l } 
\text { March 1, to be issued on April 15. The stock was trading at \$12 per share prior } \
\text { to the dividend. }
\end{array} \
\hline \text { Mar. } 31 & \text { Sold 100,000 shares of common stock for } \$ 13 \text { per share. } \
\hline & \
\hline \text { Apr. 15 } & \text { Issued the stock dividend. } \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { |l| l | l | l | } 
\hl

Question 4

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company has no preferred stock.The company sold 3,000 shares before the end of the year.There were no other stock transactions.The company's earnings per share is:

Accepted Answer

A)  $1.65. 
B)  $1.59. 
C)  $44.00. 
D)  $26.67. 
E)  $1.71. 
A)  $1.65. 
B)  $1.59. 
C)  $44.00. 
D)  $26.67. 
E)  $1.71.

Question 5

A class of stock that can usually be issued at any price without creating a minimum legal capital deficiency is called:

Accepted Answer

A)  Convertible stock. 
B)  No-par stock. 
C)  Callable stock. 
D)  Noncumulative stock. 
E)  Discounted stock. 
A)  Convertible stock. 
B)  No-par stock. 
C)  Callable stock. 
D)  Noncumulative stock. 
E)  Discounted stock.

Question 6

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 payment of the dividend 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 7

Paid and declared preferred dividends are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

A corporation reported net income of $2,730,000 and paid preferred cash dividends of $120,000 during the current year.There were 600,000 weighted-average shares of common stock outstanding and the market price per common share at year-end was $58.30.Calculate the company's price-earnings ratio.

Accepted Answer

Price-Earnings Ratio = Market Price per

Question 10

Beagle Company earned $90,000 in income and paid cash dividends of $7,000 to preferred shareholders during the current year.Beagle had 15,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.

Accepted Answer

Earnings per Share = Net Incom

Question 11

Corporations avoid many of the state regulations and controls that proprietorships and partnerships are subject to.

Accepted Answer

A) True 
 B)False

Question 12

A stock dividend does not reduce a corporation's assets or its stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 13

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Accepted Answer

A)  Always equal to its par value. 
B)  Always equal to its stated value. 
C)  Referred to as paid-in capital. 
D)  Referred to as retained earnings. 
E)  Always below its stated value. 
A)  Always equal to its par value. 
B)  Always equal to its stated value. 
C)  Referred to as paid-in capital. 
D)  Referred to as retained earnings. 
E)  Always below its stated value.

Question 14

Small stock dividends are recorded at par or stated value.

Accepted Answer

A) True 
 B)False

Question 15

A company issued 60 shares of $100 par value common stock for $7,000 cash.The total amount of paid-in capital in excess of par is:

Accepted Answer

A)  $100. 
B)  $600. 
C)  $1,000. 
D)  $6,000. 
E)  $7,000. 
A)  $100. 
B)  $600. 
C)  $1,000. 
D)  $6,000. 
E)  $7,000.

Question 16

Changes in accounting estimates are:

Accepted Answer

A)  Considered accounting errors. 
B)  Reported as prior period adjustments. 
C)  Accounted for with a cumulative "catch-up" adjustment. 
D)  Extraordinary items. 
E)  Accounted for in current and future periods. 
A)  Considered accounting errors. 
B)  Reported as prior period adjustments. 
C)  Accounted for with a cumulative "catch-up" adjustment. 
D)  Extraordinary items. 
E)  Accounted for in current and future periods.

Question 17

In many states,the minimum amount that stockholders must contribute to the corporation,and which is intended to protect the creditors of the corporation,is called the:

Accepted Answer

A)  Par value of preferred. 
B)  Minimum legal capital. 
C)  Premium capital. 
D)  Stated value. 
E)  Working capital. 
A)  Par value of preferred. 
B)  Minimum legal capital. 
C)  Premium capital. 
D)  Stated value. 
E)  Working capital.

Question 18

Prior period adjustments are reported in the:

Accepted Answer

A)  Multiple-step income statement. 
B)  Balance sheet. 
C)  Statement of retained earnings. 
D)  Statement of cash flows. 
E)  Single-step income statement. 
A)  Multiple-step income statement. 
B)  Balance sheet. 
C)  Statement of retained earnings. 
D)  Statement of cash flows. 
E)  Single-step income statement.

Question 19

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Accepted Answer

A) True 
 B)False

Question 20

A dividend preference for preferred stock means that:

Accepted Answer

A)  Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders. 
B)  Preferred shareholders are guaranteed dividends. 
C)  Dividends are paid quarterly. 
D)  Preferred stockholders prefer dividends more than common stockholders. 
E)  Dividends must be declared on preferred stock. 
A)  Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders. 
B)  Preferred shareholders are guaranteed dividends. 
C)  Dividends are paid quarterly. 
D)  Preferred stockholders prefer dividends more than common stockholders. 
E)  Dividends must be declared on preferred stock.

Stockholders' equity consists of which of the following?

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company has no preferred stock.The company sold 3,000 shares before the end of the year.There were no other stock transactions.The company's earnings per share is:

A class of stock that can usually be issued at any price without creating a minimum legal capital deficiency is called:

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 payment of the dividend is:

Paid and declared preferred dividends are called dividends in arrears.

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

A corporation reported net income of $2,730,000 and paid preferred cash dividends of $120,000 during the current year.There were 600,000 weighted-average shares of common stock outstanding and the market price per common share at year-end was $58.30.Calculate the company's price-earnings ratio.

Beagle Company earned $90,000 in income and paid cash dividends of $7,000 to preferred shareholders during the current year.Beagle had 15,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.

Corporations avoid many of the state regulations and controls that proprietorships and partnerships are subject to.

A stock dividend does not reduce a corporation's assets or its stockholders' equity.

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Small stock dividends are recorded at par or stated value.

A company issued 60 shares of $100 par value common stock for $7,000 cash.The total amount of paid-in capital in excess of par is:

Changes in accounting estimates are:

In many states,the minimum amount that stockholders must contribute to the corporation,and which is intended to protect the creditors of the corporation,is called the:

Prior period adjustments are reported in the:

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

A dividend preference for preferred stock means that:

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

Stockholders' equity consists of which of the following?

A company's board of directors votes to declare a cash dividend of $.75 per share of common stock.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Mayan Company had net income of $132,000.The weighted-average common shares outstanding were 80,000.The company has no preferred stock.The company sold 3,000 shares before the end of the year.There were no other stock transactions.The company's earnings per share is:

A class of stock that can usually be issued at any price without creating a minimum legal capital deficiency is called:

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 payment of the dividend is:

Paid and declared preferred dividends are called dividends in arrears.

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

A corporation reported net income of $2,730,000 and paid preferred cash dividends of $120,000 during the current year.There were 600,000 weighted-average shares of common stock outstanding and the market price per common share at year-end was $58.30.Calculate the company's price-earnings ratio.

Beagle Company earned $90,000 in income and paid cash dividends of $7,000 to preferred shareholders during the current year.Beagle had 15,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.

Corporations avoid many of the state regulations and controls that proprietorships and partnerships are subject to.

A stock dividend does not reduce a corporation's assets or its stockholders' equity.

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Small stock dividends are recorded at par or stated value.

A company issued 60 shares of $100 par value common stock for $7,000 cash.The total amount of paid-in capital in excess of par is:

Changes in accounting estimates are:

In many states,the minimum amount that stockholders must contribute to the corporation,and which is intended to protect the creditors of the corporation,is called the:

Prior period adjustments are reported in the:

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

A dividend preference for preferred stock means that:

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