Question 1

Memorandum entry is an entry in the journal that notes a significant event but has no debit or credit amount.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true of a stock split and a stock dividend?

Accepted Answer

A) A stock split will increase total stockholders' equity,but a stock dividend will not. 
B) Neither a stock split nor a stock dividend will increase total stockholders' equity. 
C) A stock dividend will increase total stockholders' equity,but a stock split will not. 
D) A stock split will decrease retained earnings,but a stock dividend will not. 
A) A stock split will increase total stockholders' equity,but a stock dividend will not. 
B) Neither a stock split nor a stock dividend will increase total stockholders' equity. 
C) A stock dividend will increase total stockholders' equity,but a stock split will not. 
D) A stock split will decrease retained earnings,but a stock dividend will not.

Question 3

Which of the following actions will decrease Retained Earnings?

Accepted Answer

A) repayment of bond principal 
B) stock split 
C) stock dividend declared 
D) purchase of treasury stock 
A) repayment of bond principal 
B) stock split 
C) stock dividend declared 
D) purchase of treasury stock

Question 4

Corporations may not retire preferred stock in order to avoid paying the preferred dividends.

Accepted Answer

A) True 
 B)False

Question 5

Accounting for stated value common stock is identical to accounting for par value stock.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following actions will decrease the amount of Total Stockholders' Equity?

Accepted Answer

A) cash dividend declared 
B) stock split 
C) stock dividend declared 
D) repayment of bond principal 
A) cash dividend declared 
B) stock split 
C) stock dividend declared 
D) repayment of bond principal

Question 7

A stock split decreases par value per share,whereas stock dividends do not affect par value per share.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is included in the entry to record the issuance of 5,000 shares of $8 par value common stock at $22 per share cash?

Accepted Answer

A) Cash is debited for $110,000. 
B) Common Stock is debited for $40,000. 
C) Common Stock is credited for $110,000. 
D) Paid-In Capital in Excess of Par-Common is debited for $70,000. 
A) Cash is debited for $110,000. 
B) Common Stock is debited for $40,000. 
C) Common Stock is credited for $110,000. 
D) Paid-In Capital in Excess of Par-Common is debited for $70,000.

Question 9

Which of the following requires a formal journal entry?

Accepted Answer

A) selection of a new CEO 
B) stock dividend distribution 
C) stock split 
D) date of record 
A) selection of a new CEO 
B) stock dividend distribution 
C) stock split 
D) date of record

Question 10

Ross Corporation reported the following:
 
Which of the following is included in the entry to record the corporation's purchase of 40,000 shares of its common stock for $14.00 per share?

Accepted Answer

A) Treasury Stock-Common is debited for $560,000. 
B) Paid-In Capital From Treasury Stock Transactions is credited for $285,000. 
C) Retained Earnings is debited for $560,000. 
D) Common Stock-$5 Par Value is credited for $200,000. 
A) Treasury Stock-Common is debited for $560,000. 
B) Paid-In Capital From Treasury Stock Transactions is credited for $285,000. 
C) Retained Earnings is debited for $560,000. 
D) Common Stock-$5 Par Value is credited for $200,000.

Question 11

When stock is issued for assets other than cash,the transaction is recorded at the market value of the stock issued or the market value of the assets received,whichever is more clearly determinable.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a reason for a company to announce a stock split?

Accepted Answer

A) to reward investors 
B) to increase total stockholders' equity 
C) to decrease the market price at which the stock is trading 
D) to provide the shareholders with something of value,when the company cannot afford a cash dividend 
A) to reward investors 
B) to increase total stockholders' equity 
C) to decrease the market price at which the stock is trading 
D) to provide the shareholders with something of value,when the company cannot afford a cash dividend

Question 13

Happy Farmer,Inc.has 43,000 shares of common stock outstanding and 3,000 shares of preferred stock outstanding.The common stock is $0.08 par value;the preferred stock is 5% noncumulative with a $100.00 par value.On October 15,2017,the company declares a total dividend payment of $44,000.What is the total amount of dividends that will be paid to the common stockholders?

Accepted Answer

A) $44,000 
B) $29,000 
C) $3,440 
D) $24,000 
A) $44,000 
B) $29,000 
C) $3,440 
D) $24,000

Question 14

Treasury stock is recorded at cost,without reference to par value.

Accepted Answer

A) True 
 B)False

Question 15

Stated value stock is no-par stock that has been assigned an amount similar to par value.

Accepted Answer

A) True 
 B)False

Question 16

Ramos Corporation reported the following equity section on its current balance sheet.The common stock is currently selling for $18.25 per share.
 
After the declaration and distribution of a 14% stock dividend,what is the total number of common shares issued?

Accepted Answer

A) 24,000 
B) 181,260 
C) 159,000 
D) 22,260 
A) 24,000 
B) 181,260 
C) 159,000 
D) 22,260

Question 17

Paid-in capital is externally generated capital and results from transactions with outsiders.

Accepted Answer

A) True 
 B)False

Question 18

The statement of stockholders' equity has less information than the statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 19

When a company has issued both preferred and common stock,the common stockholders receive their dividends first.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following actions could increase the balance in the Paid-In Capital in Excess of Par-Common account?

Accepted Answer

A) cash dividend declared 
B) stock split 
C) 10% stock dividend declared 
D) purchase of treasury stock 
A) cash dividend declared 
B) stock split 
C) 10% stock dividend declared 
D) purchase of treasury stock

Exam 13: Corporations

Memorandum entry is an entry in the journal that notes a significant event but has no debit or credit amount.

Which of the following is true of a stock split and a stock dividend?

Which of the following actions will decrease Retained Earnings?

Corporations may not retire preferred stock in order to avoid paying the preferred dividends.

Accounting for stated value common stock is identical to accounting for par value stock.

Which of the following actions will decrease the amount of Total Stockholders' Equity?

A stock split decreases par value per share,whereas stock dividends do not affect par value per share.

Which of the following is included in the entry to record the issuance of 5,000 shares of $8 par value common stock at $22 per share cash?

Which of the following requires a formal journal entry?

Ross Corporation reported the following: Which of the following is included in the entry to record the corporation's purchase of 40,000 shares of its common stock for $14.00 per share?

When stock is issued for assets other than cash,the transaction is recorded at the market value of the stock issued or the market value of the assets received,whichever is more clearly determinable.

Which of the following is a reason for a company to announce a stock split?

Treasury stock is recorded at cost,without reference to par value.

Stated value stock is no-par stock that has been assigned an amount similar to par value.

Ramos Corporation reported the following equity section on its current balance sheet.The common stock is currently selling for $18.25 per share. After the declaration and distribution of a 14% stock dividend,what is the total number of common shares issued?

Paid-in capital is externally generated capital and results from transactions with outsiders.

The statement of stockholders' equity has less information than the statement of retained earnings.

When a company has issued both preferred and common stock,the common stockholders receive their dividends first.

Which of the following actions could increase the balance in the Paid-In Capital in Excess of Par-Common account?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll

Partnerships

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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