Question 1

The underwriters guarantees the sale of stock for a fee which is usually less than

Accepted Answer

A)  5%. 
B)  20%. 
C)  2%. 
D)  1%. 
A)  5%. 
B)  20%. 
C)  2%. 
D)  1%.

Question 2

The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of record.

Accepted Answer

A) True 
 B)False

Question 3

On January 1, 2010, Belmont Corporation had 50,000 shares of $10 par value common stock issued and outstanding. All 50,000 shares had been issued in a prior period at $15 per share. On February 1, 2010, Belmont purchased 2,000 shares of treasury stock for $18 per share and later sold the treasury shares for $20 per share on March 2, 2010. The entry to record the sale of the treasury shares on March 2, 2010, is :

Accepted Answer

The answer of On January 1, 2010, Belmont Corporation had...

Question 4

The following amounts were reported by Ebert Corporation on December 31, 2009 :
   On January 3, 2010 , 5,000 shares of treasury stock were sold. After the sale of the treasury shares, total stockholders' equity amounted to $277,500. No stockholders' equity transactions other than the sale of the treasury stock occurred between December 31, 2009 , and January 3, 2010 . From the information given, compute the selling price per share of the treasury stock.

Accepted Answer

$13.50 per share [27

Question 5

An advantage of the corporate form of business is

Accepted Answer

A)  possible lack of control by owners. 
B)  tax treatment. 
C)  lack of mutual agency. 
D)  government regulation. 
A)  possible lack of control by owners. 
B)  tax treatment. 
C)  lack of mutual agency. 
D)  government regulation.

Question 6

Par value is the minimum cushion of capital established for the protection of

Accepted Answer

A)  investors (stockholders). 
B)  management. 
C)  creditors. 
D)  all of these. 
A)  investors (stockholders). 
B)  management. 
C)  creditors. 
D)  all of these.

Question 7

When common stock is issued by a corporation for a cash price above par value, the excess of the cash proceeds over the par value should be reported in the financial statements as a component of

Accepted Answer

A)  retained earnings on the balance sheet. 
B)  total liabilities on the balance sheet. 
C)  operating income on the income statement. 
D)  total contributed capital on the balance sheet. 
A)  retained earnings on the balance sheet. 
B)  total liabilities on the balance sheet. 
C)  operating income on the income statement. 
D)  total contributed capital on the balance sheet.

Question 8

Use the following information to answer the question below. The following accounts appear in the ledger of Sayre Corporation on December 31, 2010
  A balance sheet prepared on December 31, 2010 , would report total contributed capital of

Accepted Answer

A)  $88,000. 
B)  $95,000. 
C)  $113,000. 
D)  $153,000. 
A)  $88,000. 
B)  $95,000. 
C)  $113,000. 
D)  $153,000.

Question 9

When treasury stock is sold at a price below its cost, the entry to record the sale has the effect of reducing total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 10

The number of authorized shares should always equal or exceed the number of outstanding shares.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would not be an account in the general ledger of a corporation?

Accepted Answer

A)  Dividends Payable 
B)  Retained Earnings 
C)  Additional Paid-in Capital 
D)  Dividends in Arrears 
A)  Dividends Payable 
B)  Retained Earnings 
C)  Additional Paid-in Capital 
D)  Dividends in Arrears

Question 12

Indicate on the blanks below the net effect (I = increase, D = decrease, NE = no effect) of each of the following entries on working capital.
_____ 1. To record the declaration of a cash dividend
_____ 2. To record the payment of a previously declared and recorded cash dividend
_____ 3. To close the Dividends account at the end of the accounting period

Accepted Answer

The answer of Indicate on the blanks below the net...

Question 13

The board of directors of Irondale Corporation declared a cash dividend of $2.50 per share on 57,000 shares of common stock on June 14, 2010. The dividend is to be paid on July 15, 2010, to shareholders of record on July 1, 2010. The proper entry to be recorded on June 14, 2010 is,

Accepted Answer

A)  Dividends 142,500
Dividends Payable 142,500 
B)  Dividends payable 142,500
Cash 142,500 
C)  Dividends 142,500
Retained Earnings 142,500 
D)  Dividends payable 142,500
Dividends 142,500 
A)  Dividends 142,500
Dividends Payable 142,500 
B)  Dividends payable 142,500
Cash 142,500 
C)  Dividends 142,500
Retained Earnings 142,500 
D)  Dividends payable 142,500
Dividends 142,500

Question 14

Start-up and organization costs should be amortized over ten years or more.

Accepted Answer

A) True 
 B)False

Question 15

Under what circumstances compensation expense should be recorded for a stock option plan?

Accepted Answer

Compensation expense is recorded only wh

Question 16

An advantage of the corporate form is the ability of the board to hire professional managers to attend to the corporation's affairs.

Accepted Answer

A) True 
 B)False

Question 17

Stockholders elect the board of directors who appoints the officers of a corporation.

Accepted Answer

A) True 
 B)False

Question 18

Dividends in arrears are disclosed as liabilities of a corporation.

Accepted Answer

A) True 
 B)False

Question 19

When callable preferred stock is called and surrendered, the shareholder is entitled to all of the following except

Accepted Answer

A)  dividends in arrears. 
B)  a prorated portion of the current period's dividend. 
C)  a call premium. 
D)  the market value of the stock. 
A)  dividends in arrears. 
B)  a prorated portion of the current period's dividend. 
C)  a call premium. 
D)  the market value of the stock.

Question 20

Which of the following classifications represents the fewest shares of common stock?

Accepted Answer

A)  Outstanding shares 
B)  Issued shares 
C)  Treasury shares 
D)  Impossible to determine 
A)  Outstanding shares 
B)  Issued shares 
C)  Treasury shares 
D)  Impossible to determine

Exam 12: Contributed Capital

The underwriters guarantees the sale of stock for a fee which is usually less than

The declaration of a cash dividend causes an increase in a corporation's liabilities at the date of record.

An advantage of the corporate form of business is

Par value is the minimum cushion of capital established for the protection of

When common stock is issued by a corporation for a cash price above par value, the excess of the cash proceeds over the par value should be reported in the financial statements as a component of

Use the following information to answer the question below. The following accounts appear in the ledger of Sayre Corporation on December 31, 2010 A balance sheet prepared on December 31, 2010 , would report total contributed capital of

When treasury stock is sold at a price below its cost, the entry to record the sale has the effect of reducing total stockholders' equity.

The number of authorized shares should always equal or exceed the number of outstanding shares.

Which of the following would not be an account in the general ledger of a corporation?

The board of directors of Irondale Corporation declared a cash dividend of $2.50 per share on 57,000 shares of common stock on June 14, 2010. The dividend is to be paid on July 15, 2010, to shareholders of record on July 1, 2010. The proper entry to be recorded on June 14, 2010 is,

Start-up and organization costs should be amortized over ten years or more.

Under what circumstances compensation expense should be recorded for a stock option plan?

An advantage of the corporate form is the ability of the board to hire professional managers to attend to the corporation's affairs.

Stockholders elect the board of directors who appoints the officers of a corporation.

Dividends in arrears are disclosed as liabilities of a corporation.

When callable preferred stock is called and surrendered, the shareholder is entitled to all of the following except

Which of the following classifications represents the fewest shares of common stock?

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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