Question 1

The sale of common stock above par was recorded by crediting Common Stock for the total amount. This error would cause:

Accepted Answer

A) the period end stockholders' equity to be overstated. 
B) the period end stockholders' equity to be understated. 
C) the period's net income to be understated. 
D) None of these are correct. 
A) the period end stockholders' equity to be overstated. 
B) the period end stockholders' equity to be understated. 
C) the period's net income to be understated. 
D) None of these are correct.

Question 2

Which of the following would normally not appear in the Stockholders' Equity section of the balance sheet?

Accepted Answer

A) Cash 
B) Paid-in Capital 
C) Common Stock 
D) Preferred Stock 
A) Cash 
B) Paid-in Capital 
C) Common Stock 
D) Preferred Stock

Question 3

Officers of the corporation are:

Accepted Answer

A) appointed by the stockholders. 
B) stockholders of the corporation. 
C) appointed by the board of directors. 
D) None of these answers are correct. 
A) appointed by the stockholders. 
B) stockholders of the corporation. 
C) appointed by the board of directors. 
D) None of these answers are correct.

Question 4

The Logan Company issued 140 shares of its $12 par value stock for $14 per share. The entry to record the receipt of cash and issuance of the stock would include a:

Accepted Answer

A) debit to Cash of $1,680; credit to Common Stock for $1,680. 
B) debit to Cash for $1,960. 
C) credit to Common Stock for $1,960. 
D) debit to Discount on Common Stock for $280 
A) debit to Cash of $1,680; credit to Common Stock for $1,680. 
B) debit to Cash for $1,960. 
C) credit to Common Stock for $1,960. 
D) debit to Discount on Common Stock for $280

Question 5

Par value is equal to:

Accepted Answer

A) market value of the stock. 
B) the amount stated in the charter or legal capital. 
C) retained earnings. 
D) the initial price at which the stock is sold. 
A) market value of the stock. 
B) the amount stated in the charter or legal capital. 
C) retained earnings. 
D) the initial price at which the stock is sold.

Question 6

When a stock subscription is received, Common Stock subscribed is credited for the total par value.

Accepted Answer

A) True 
 B)False

Question 7

List and discuss the (a)advantages and (b)disadvantages of the corporation form of business.

Accepted Answer

a. The advantages of a corporation inclu

Question 8

Jane Kathryn has 15,000 shares outstanding of $15 par value, 5% preferred stock and 100,000 shares outstanding $10 par value common stock. In the first 3 years of operations, the company paid dividends in Year 1, $0; Year 2, $10,000; Year 3, $20,000. Calculate the dividend paid to preferred and common stockholders under the following independent situations:
a)Preferred is non-cumulative and nonparticipating.
   b)Preferred is cumulative and nonparticipating.

Accepted Answer

a)Preferred is non-cumulative

Question 9

When stock is exchanged for non-cash assets:

Accepted Answer

A) debit the asset for prior book value; credit Common Stock for cash received. 
B) debit assets for market value; credit Common Stock for par value and, if needed, Paid-in Capital in Excess of Par. 
C) debit assets for market value; credit Common Stock for market value. 
D) debit assets for par value; credit Common Stock for par value. 
A) debit the asset for prior book value; credit Common Stock for cash received. 
B) debit assets for market value; credit Common Stock for par value and, if needed, Paid-in Capital in Excess of Par. 
C) debit assets for market value; credit Common Stock for market value. 
D) debit assets for par value; credit Common Stock for par value.

Question 10

List and discuss the following:
a. Rights of common stockholders
b. Rights of preferred stockholders

Accepted Answer

a. The rights of common stockholders inc

Question 11

The entry to record selling 150 shares of no-par common stock with a stated value of $30 for $40 would be to:

Accepted Answer

A) debit Common Stock for $6,000; credit Cash for $6,000. 
B) debit Cash for $6,000; credit Common Stock for $6,000. 
C) debit Cash for $6,000; credit Common Stock for $4,500; credit Paid-In Capital in Excess of Stated Value-Common for $1,500. 
D) debit Cash for $6,000; credit Common Stock for $4,500; credit Paid-In Capital in Excess of Par Value-Common for $1,500. 
A) debit Common Stock for $6,000; credit Cash for $6,000. 
B) debit Cash for $6,000; credit Common Stock for $6,000. 
C) debit Cash for $6,000; credit Common Stock for $4,500; credit Paid-In Capital in Excess of Stated Value-Common for $1,500. 
D) debit Cash for $6,000; credit Common Stock for $4,500; credit Paid-In Capital in Excess of Par Value-Common for $1,500.

Question 12

Using the following accounts:
   Indicate the account(s)to be debited and credited to record the following transactions.
-Purchased machinery for cash.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Using the following accounts:
   Indicate...

Question 13

Which of the following is not a characteristic of a corporation?

Accepted Answer

A) Ease of formation 
B) No mutual agency 
C) Unlimited life 
D) Limited liability 
A) Ease of formation 
B) No mutual agency 
C) Unlimited life 
D) Limited liability

Question 14

The Collins Corporation Stockholders' Equity section includes the following:   What was the total amount preferred stock was sold for?

Accepted Answer

A) $12,000 
B) $14,700 
C) $16,100 
D) $20,200 
A) $12,000 
B) $14,700 
C) $16,100 
D) $20,200

Question 15

A stock certificate is released for authorized stock.

Accepted Answer

A) True 
 B)False

Question 16

Each share of capital stock of a corporation gives its owner the right to:

Accepted Answer

A) share in the assets if the corporation liquidates. 
B) set company policy. 
C) hire and fire employees. 
D) manage the daily operations of the business. 
A) share in the assets if the corporation liquidates. 
B) set company policy. 
C) hire and fire employees. 
D) manage the daily operations of the business.

Question 17

A corporation shares its profits with stockholders in the form of dividends.

Accepted Answer

A) True 
 B)False

Question 18

The major parts of the Stockholders' Equity section of the balance sheet are:

Accepted Answer

A) Paid-in Capital and Retained Earnings. 
B) Stock and Retained Earnings. 
C) Stock, Paid-in Capital, and Retained Earnings. 
D) Authorized Stock and Preferred Stock. 
A) Paid-in Capital and Retained Earnings. 
B) Stock and Retained Earnings. 
C) Stock, Paid-in Capital, and Retained Earnings. 
D) Authorized Stock and Preferred Stock.

Question 19

If stock shares are sold at more than their par value, the excess money is called:

Accepted Answer

A) earnings. 
B) paid-in capital in excess of par. 
C) gain on issue of stock. 
D) discount on issue of stock. 
A) earnings. 
B) paid-in capital in excess of par. 
C) gain on issue of stock. 
D) discount on issue of stock.

Question 20

Custer.com Company's outstanding stock is 100 shares of $100, 6% cumulative nonparticipating preferred stock and 1,000 shares of $10 par value common stock. Custer paid $2,000 cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received:

Accepted Answer

A) $0. 
B) $800. 
C) $1,818. 
D) $600. 
A) $0. 
B) $800. 
C) $1,818. 
D) $600.

Exam 18: Corporations: Organizations and Stock

The sale of common stock above par was recorded by crediting Common Stock for the total amount. This error would cause:

Which of the following would normally not appear in the Stockholders' Equity section of the balance sheet?

Officers of the corporation are:

The Logan Company issued 140 shares of its $12 par value stock for $14 per share. The entry to record the receipt of cash and issuance of the stock would include a:

Par value is equal to:

When a stock subscription is received, Common Stock subscribed is credited for the total par value.

List and discuss the (a)advantages and (b)disadvantages of the corporation form of business.

When stock is exchanged for non-cash assets:

List and discuss the following: a. Rights of common stockholders b. Rights of preferred stockholders

The entry to record selling 150 shares of no-par common stock with a stated value of $30 for $40 would be to:

Using the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Purchased machinery for cash. Debit ________ & ________ & ________ Credit ________ & ________ & ________

Which of the following is not a characteristic of a corporation?

The Collins Corporation Stockholders' Equity section includes the following: What was the total amount preferred stock was sold for?

A stock certificate is released for authorized stock.

Each share of capital stock of a corporation gives its owner the right to:

A corporation shares its profits with stockholders in the form of dividends.

The major parts of the Stockholders' Equity section of the balance sheet are:

If stock shares are sold at more than their par value, the excess money is called:

Custer.com Company's outstanding stock is 100 shares of $100, 6% cumulative nonparticipating preferred stock and 1,000 shares of $10 par value common stock. Custer paid $2,000 cash dividends including one-year dividends in arrears to preferred stockholders. Common stockholders received:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes: the Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters

Using the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Purchased machinery for cash. Debit & & Credit & &