Question 1

When a company issues common stock at a price per share greater than its par value per share,the excess should be credited to:

Accepted Answer

A) Retained Earnings. 
B) Common Stock. 
C) Paid-in Capital in Excess of Par-Common. 
D) Excess Capital. 
A) Retained Earnings. 
B) Common Stock. 
C) Paid-in Capital in Excess of Par-Common. 
D) Excess Capital.

Question 2

Stockholders of a corporation directly elect the:

Accepted Answer

A) Board of directors. 
B) President of the corporation. 
C) Chief Financial Officer of the corporation. 
D) Chairperson of the Board. 
A) Board of directors. 
B) President of the corporation. 
C) Chief Financial Officer of the corporation. 
D) Chairperson of the Board.

Question 3

Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued.The journal entry to record Kunze's purchase of 10,000 shares of common stock at $4 per share would be:

Accepted Answer

A) debit Common Stock for $10,000,debit Paid-in Capital in Excess of Par-Common for 30,000 and credit Cash for $40,000. 
B) debit Common Stock for $40,000 and credit Cash for $40,000. 
C) debit Cash for $40,000,credit Common Stock for $10,000 and credit Paid-in Capital in Excess of Par-Common for $30,000. 
D) debit Treasury Stock for $40,000 and credit Cash for $40,000. 
A) debit Common Stock for $10,000,debit Paid-in Capital in Excess of Par-Common for 30,000 and credit Cash for $40,000. 
B) debit Common Stock for $40,000 and credit Cash for $40,000. 
C) debit Cash for $40,000,credit Common Stock for $10,000 and credit Paid-in Capital in Excess of Par-Common for $30,000. 
D) debit Treasury Stock for $40,000 and credit Cash for $40,000.

Question 4

The charter reveals the number of shares of common stock a corporation is authorized to issue.

Accepted Answer

A) True 
 B)False

Question 5

On February 4,Osterheld Corporation's stockholders' equity section appears as follows:
   On February 4,Osterheld Corporation declares and distributes a 10% stock dividend when the market value of the stock is $5.
Required:
Prepare the journal entry for the stock dividend.
Show the balances in the stockholders' equity accounts after the stock dividend has been distributed.

Accepted Answer

Journal entry:
 @#IMG-DLM& Ending Balances in Acco

Question 6

To record a 6% stock dividend,accountants use ________.To record a 55% stock dividend,accountants use ________.

Accepted Answer

A) market price per share;market price per share 
B) par value per share;par value per share 
C) par value per share;market price per share 
D) market price per share;par value per share 
A) market price per share;market price per share 
B) par value per share;par value per share 
C) par value per share;market price per share 
D) market price per share;par value per share

Question 7

The purchase of treasury stock has the same effect on stockholders' equity as issuing stock.

Accepted Answer

A) True 
 B)False

Question 8

A debit balance in the Retained Earnings account indicates a deficit in Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 9

Treasury stock is a contra-stockholders' equity account.

Accepted Answer

A) True 
 B)False

Question 10

Declaring and distributing stock dividends:

Accepted Answer

A) increases retained earnings. 
B) increases the total liabilities of the corporation and decreases the total stockholders' equity. 
C) reduces the total assets of the corporation. 
D) has no effect on total stockholders' equity. 
A) increases retained earnings. 
B) increases the total liabilities of the corporation and decreases the total stockholders' equity. 
C) reduces the total assets of the corporation. 
D) has no effect on total stockholders' equity.

Question 11

Which of the following is NOT considered to be an advantage of forming a corporation?

Accepted Answer

A) continuous life 
B) government regulation 
C) ability to raise more capital than a partnership or proprietorship 
D) limited liability of stockholders for corporation's debts 
A) continuous life 
B) government regulation 
C) ability to raise more capital than a partnership or proprietorship 
D) limited liability of stockholders for corporation's debts

Question 12

If a corporation has only one class of stock,it is understood to be:

Accepted Answer

A) preferred stock. 
B) common stock. 
C) participating stock. 
D) redeemable stock. 
A) preferred stock. 
B) common stock. 
C) participating stock. 
D) redeemable stock.

Question 13

A credit balance in Retained Earnings indicates that a company's lifetime earnings exceeded its lifetime losses and dividends declared.

Accepted Answer

A) True 
 B)False

Question 14

Which statement about corporations is FALSE?

Accepted Answer

A) The ease of transferring ownership is an advantage. 
B) A greater ability to raise capital than other forms of organizations is an advantage. 
C) Limited life is an advantage. 
D) Double taxation of distributed profits is a disadvantage. 
A) The ease of transferring ownership is an advantage. 
B) A greater ability to raise capital than other forms of organizations is an advantage. 
C) Limited life is an advantage. 
D) Double taxation of distributed profits is a disadvantage.

Question 15

On February 1,United Delivery Services reports Common Stock of $1 million,Paid-in Capital in Excess of Par-Common of $9 million and Retained Earnings of $10 million.On February 2,United Delivery Services reacquired 10,000 shares of its $10 par value common stock at $50 per share.On February 23,United Delivery Services sold 1,000 of the reacquired shares at $65 per share.On February 27,the remaining 9,000 shares were sold at $40 per share.
Required:
Prepare the journal entries necessary to record these transactions.Omit explanations.

Accepted Answer

The answer of On February 1,United Delivery Services reports Common...

Question 16

Common stockholders receive dividends even if the total dividend is not large enough to pay the preferred stockholders first.

Accepted Answer

A) True 
 B)False

Question 17

Pillsbury Company declares and distributes a 30% common stock dividend when it has 90,000 shares of $10 par common stock outstanding.The market price per share is $35 at the date of declaration.Which journal entry is prepared?

Accepted Answer

A) debit Retained Earnings $945,000,credit Common Stock $270,000 and credit Paid-in Capital in Excess of Par-Common $675,000 
B) debit Retained Earnings $945,000,credit Paid-in Capital in Excess of Par-Common $945,000 
C) debit Retained Earnings $945,000 and credit Common Stock $945,000 
D) debit Retained Earnings $270,000 and credit Common Stock $270,000 
A) debit Retained Earnings $945,000,credit Common Stock $270,000 and credit Paid-in Capital in Excess of Par-Common $675,000 
B) debit Retained Earnings $945,000,credit Paid-in Capital in Excess of Par-Common $945,000 
C) debit Retained Earnings $945,000 and credit Common Stock $945,000 
D) debit Retained Earnings $270,000 and credit Common Stock $270,000

Question 18

On May 15,the board of directors declared a cash dividend of $75,000.The date of record is June 1 and the payment date is June 20.
Prepare the journal entries to record this cash dividend.Omit explanations.

Accepted Answer

The answer of On May 15,the board of directors declared...

Question 19

A company has Total Paid-in Capital of $100,000,Retained Earnings of $200,000,Treasury Stock of $10,000 and Accumulated Other Comprehensive Income of $200,000.What is the CORRECT statement about listing these accounts on the balance sheet?

Accepted Answer

A) Retained Earnings should be the last line before Total Stockholders' Equity. 
B) Total Paid-in Capital should be the last line before Total Stockholders' Equity. 
C) Treasury Stock or Accumulated Other Comprehensive Income should be the last line before Total Stockholders' Equity. 
D) There is no specific order used by Generally Accepted Accounting Principles. 
A) Retained Earnings should be the last line before Total Stockholders' Equity. 
B) Total Paid-in Capital should be the last line before Total Stockholders' Equity. 
C) Treasury Stock or Accumulated Other Comprehensive Income should be the last line before Total Stockholders' Equity. 
D) There is no specific order used by Generally Accepted Accounting Principles.

Question 20

Apple Inc.issued 4 million shares of no-par common stock for $4 million.What journal entry is prepared?

Accepted Answer

A) debit Cash $4 million and credit Paid-in Capital in Excess of Par $4 million 
B) debit Cash $4 million and credit Retained Earnings $4 million 
C) debit Cash $4 million and credit Paid-in Capital in Excess of Stated Value $4 million 
D) debit Cash $4 million and credit Common Stock $4 million 
A) debit Cash $4 million and credit Paid-in Capital in Excess of Par $4 million 
B) debit Cash $4 million and credit Retained Earnings $4 million 
C) debit Cash $4 million and credit Paid-in Capital in Excess of Stated Value $4 million 
D) debit Cash $4 million and credit Common Stock $4 million

When a company issues common stock at a price per share greater than its par value per share,the excess should be credited to:

Stockholders of a corporation directly elect the:

Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued.The journal entry to record Kunze's purchase of 10,000 shares of common stock at $4 per share would be:

The charter reveals the number of shares of common stock a corporation is authorized to issue.

To record a 6% stock dividend,accountants use .To record a 55% stock dividend,accountants use .

The purchase of treasury stock has the same effect on stockholders' equity as issuing stock.

A debit balance in the Retained Earnings account indicates a deficit in Retained Earnings.

Treasury stock is a contra-stockholders' equity account.

Declaring and distributing stock dividends:

Which of the following is NOT considered to be an advantage of forming a corporation?

If a corporation has only one class of stock,it is understood to be:

A credit balance in Retained Earnings indicates that a company's lifetime earnings exceeded its lifetime losses and dividends declared.

Which statement about corporations is FALSE?

Common stockholders receive dividends even if the total dividend is not large enough to pay the preferred stockholders first.

Pillsbury Company declares and distributes a 30% common stock dividend when it has 90,000 shares of $10 par common stock outstanding.The market price per share is $35 at the date of declaration.Which journal entry is prepared?

On May 15,the board of directors declared a cash dividend of $75,000.The date of record is June 1 and the payment date is June 20. Prepare the journal entries to record this cash dividend.Omit explanations.

A company has Total Paid-in Capital of $100,000,Retained Earnings of $200,000,Treasury Stock of $10,000 and Accumulated Other Comprehensive Income of $200,000.What is the CORRECT statement about listing these accounts on the balance sheet?

Apple Inc.issued 4 million shares of no-par common stock for $4 million.What journal entry is prepared?

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 10: Stockholders Equity

When a company issues common stock at a price per share greater than its par value per share,the excess should be credited to:

Stockholders of a corporation directly elect the:

Kunze Corporation has $1 par value Common Stock with 100,000 shares authorized and 25,000 shares issued.The journal entry to record Kunze's purchase of 10,000 shares of common stock at $4 per share would be:

The charter reveals the number of shares of common stock a corporation is authorized to issue.

To record a 6% stock dividend,accountants use ________.To record a 55% stock dividend,accountants use ________.

The purchase of treasury stock has the same effect on stockholders' equity as issuing stock.

A debit balance in the Retained Earnings account indicates a deficit in Retained Earnings.

Treasury stock is a contra-stockholders' equity account.

Declaring and distributing stock dividends:

Which of the following is NOT considered to be an advantage of forming a corporation?

If a corporation has only one class of stock,it is understood to be:

A credit balance in Retained Earnings indicates that a company's lifetime earnings exceeded its lifetime losses and dividends declared.

Which statement about corporations is FALSE?

Common stockholders receive dividends even if the total dividend is not large enough to pay the preferred stockholders first.

Pillsbury Company declares and distributes a 30% common stock dividend when it has 90,000 shares of $10 par common stock outstanding.The market price per share is $35 at the date of declaration.Which journal entry is prepared?

On May 15,the board of directors declared a cash dividend of $75,000.The date of record is June 1 and the payment date is June 20. Prepare the journal entries to record this cash dividend.Omit explanations.

A company has Total Paid-in Capital of $100,000,Retained Earnings of $200,000,Treasury Stock of $10,000 and Accumulated Other Comprehensive Income of $200,000.What is the CORRECT statement about listing these accounts on the balance sheet?

Apple Inc.issued 4 million shares of no-par common stock for $4 million.What journal entry is prepared?

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Current and Contingent Liabilities

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

To record a 6% stock dividend,accountants use .To record a 55% stock dividend,accountants use .