Question 1

Growth stocks generally pay large dividends on a regular basis.

Accepted Answer

A) True 
 B)False

Question 2

________ 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 3

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

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

Question 5

Common Stock Dividend Distributable is an equity account.

Accepted Answer

A) True 
 B)False

Question 6

_________is a general term that refers to any shares issued to obtain owner financing in a corporation.

Accepted Answer

The answer of _________is a general term that refers to...

Question 7

Book value per share:

Accepted Answer

A)  Measures the worth of assets. 
B)  Is assets divided by the number of common shares outstanding. 
C)  Is equal to par value per share. 
D)  Reflects the value per share if a company is liquidated at balance sheet amounts. 
E)  Is assets divided by equity. 
A)  Measures the worth of assets. 
B)  Is assets divided by the number of common shares outstanding. 
C)  Is equal to par value per share. 
D)  Reflects the value per share if a company is liquidated at balance sheet amounts. 
E)  Is assets divided by equity.

Question 8

The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:

Accepted Answer

A)  Right to call. 
B)  Proxy right. 
C)  Voting right. 
D)  Preemptive right. 
E)  Financial leverage. 
A)  Right to call. 
B)  Proxy right. 
C)  Voting right. 
D)  Preemptive right. 
E)  Financial leverage.

Question 9

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares. At the time of the stock dividend, the market value per share was $12. The entry to record this dividend is:

Accepted Answer

A)  Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000. 
B)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000. 
C)  Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000. 
D)  No entry is needed. 
E)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000. 
A)  Debit Common Stock Dividend Distributable $36,000; credit Retained Earnings $36,000. 
B)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $36,000. 
C)  Debit Retained Earnings $30,000; credit Common Stock Dividend Distributable $30,000. 
D)  No entry is needed. 
E)  Debit Retained Earnings $36,000; credit Common Stock Dividend Distributable $30,000; credit Paid-In Capital in Excess of Par Value, Common Stock $6,000.

Question 10

A liquidating dividend is:

Accepted Answer

A)  Only declared when a corporation closes down. 
B)  A return of a portion of the original investment back to the stockholders. 
C)  Only paid in shares of stock. 
D)  Only paid in assets other than cash. 
E)  Not allowed under federal law. 
A)  Only declared when a corporation closes down. 
B)  A return of a portion of the original investment back to the stockholders. 
C)  Only paid in shares of stock. 
D)  Only paid in assets other than cash. 
E)  Not allowed under federal law.

Question 11

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Accepted Answer

A) True 
 B)False

Question 12

The date the directors vote to declare and pay a dividend is called the:

Accepted Answer

A)  Date of declaration. 
B)  Date of payment. 
C)  Date of stockholders' meeting. 
D)  Date of record. 
E)  Liquidating date. 
A)  Date of declaration. 
B)  Date of payment. 
C)  Date of stockholders' meeting. 
D)  Date of record. 
E)  Liquidating date.

Question 13

Declaration of a stock dividend results in a liability being recorded.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ________.

Accepted Answer

minimum le

Question 16

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the payment of the cash dividend is:

Accepted Answer

A)  Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. 
B)  Debit Dividend Expense $12,000; credit Cash $12,000. 
C)  Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. 
D)  Debit Common Dividend Payable $12,000; credit Cash $12,000. 
E)  Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000. 
A)  Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. 
B)  Debit Dividend Expense $12,000; credit Cash $12,000. 
C)  Debit Retained Earnings $12,000; credit Common Dividend Payable $12,000. 
D)  Debit Common Dividend Payable $12,000; credit Cash $12,000. 
E)  Debit Dividend Expense $12,000; credit Common Dividend Payable $12,000.

Question 17

Minimum legal capital requirements are intended to protect creditors.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

Accepted Answer

A) True 
 B)False

Question 20

The ________ protects stockholders' proportional interest in a corporation by allowing them to purchase their proportional share of any common stock later issued by the corporation.

Accepted Answer

The answer of The ________ protects stockholders' proportional interest in...

Exam 13: Accounting for Corporations

Growth stocks generally pay large dividends on a regular basis.

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

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

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

Common Stock Dividend Distributable is an equity account.

_________is a general term that refers to any shares issued to obtain owner financing in a corporation.

Book value per share:

The right of common shareholders to purchase their proportional share of any common stock later issued by the corporation is called a:

Eastline Corporation had 10,000 shares of $10 par value common stock outstanding when the board of directors declared a stock dividend of 3,000 shares. At the time of the stock dividend, the market value per share was $12. The entry to record this dividend is:

A liquidating dividend is:

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

The date the directors vote to declare and pay a dividend is called the:

Declaration of a stock dividend results in a liability being recorded.

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

The least amount that the buyers of stock must contribute to the corporation or be subject to paying at a future date is called ________.

A company's board of directors votes to declare a cash dividend of $1.00 per share on its 12,000 common shares outstanding. The journal entry to record the payment of the cash dividend is:

Minimum legal capital requirements are intended to protect creditors.

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

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

The ________ protects stockholders' proportional interest in a corporation by allowing them to purchase their proportional share of any common stock later issued by the corporation.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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