Question 1

Passed dividends on cumulative preferred stock are recorded as a liability.

Accepted Answer

A) True 
 B)False

Question 2

If a corporation pays taxes on its income,then the stockholders will not have to pay taxes on the dividends received from that corporation.

Accepted Answer

A) True 
 B)False

Question 3

On December 31,Copper Corporation has the following data available:   What is the leverage ratio? (Round your final answer to two decimal places. )

Accepted Answer

A) 0.68 
B) 1.52 
C) 1.48 
D) 0.37 
A) 0.68 
B) 1.52 
C) 1.48 
D) 0.37

Question 4

When treasury stock is purchased,accountants record treasury stock at:

Accepted Answer

A) the stock's par value. 
B) the stock's original selling price. 
C) the stock's cost which is current market value. 
D) the difference between the original selling price and the par value. 
A) the stock's par value. 
B) the stock's original selling price. 
C) the stock's cost which is current market value. 
D) the difference between the original selling price and the par value.

Question 5

On December 31,Mercury Corporation has the following data available:   What is return on equity? (Round your final answer to two decimal places,X.XX%)

Accepted Answer

A) 34.95% 
B) 36.89% 
C) 33.01% 
D) 21.94% 
A) 34.95% 
B) 36.89% 
C) 33.01% 
D) 21.94%

Question 6

When common stock is issued for services provided to the corporation,the corporation usually recognizes an expense for the fair market value of the services provided.

Accepted Answer

A) True 
 B)False

Question 7

Dividend payments are a type of financing activity because the company is paying stockholders for the use of their money.

Accepted Answer

A) True 
 B)False

Question 8

On December 31,Sulfur Corporation has the following data available:   What is return on assets? (Round your final answer to two decimal places,X.XX%)

Accepted Answer

A) 11.25% 
B) 15.00% 
C) 32.43% 
D) 17.50% 
A) 11.25% 
B) 15.00% 
C) 32.43% 
D) 17.50%

Question 9

Which one of the following is NOT a stockholder's right of ownership in a corporation?

Accepted Answer

A) the right to participate in management by voting on matters that come before the stockholders 
B) the right to receive a proportionate share of the assets remaining after all liabilities are paid upon liquidation 
C) the right to maintain one's proportionate share of ownership in the corporation 
D) the right to decide if a dividend should be distributed 
A) the right to participate in management by voting on matters that come before the stockholders 
B) the right to receive a proportionate share of the assets remaining after all liabilities are paid upon liquidation 
C) the right to maintain one's proportionate share of ownership in the corporation 
D) the right to decide if a dividend should be distributed

Question 10

Mews Corporation has the following information reported on the balance sheet as of December 31 of the current year:   Based on the information above,how many shares of common stock have been issued?

Accepted Answer

A) 7000 
B) 6000 
C) 5000 
D) 1000 
A) 7000 
B) 6000 
C) 5000 
D) 1000

Question 11

Paltrowski Company issued 1 million shares of no-par common stock with a stated value of $9.The issue price was $40 per share.Which journal entry is prepared?

Accepted Answer

A) debit Cash $40 million and credit Common Stock $40 million 
B) debit Cash $40 million,credit Common Stock $9 million and credit Paid-in Capital in Excess of Par-Common $31 million 
C) debit Cash $40 million,credit Common Stock $9 million and credit Paid-in Capital in Excess of Stated Value-Common $31 million 
D) debit Cash $40 million and credit Retained Earnings $40 million 
A) debit Cash $40 million and credit Common Stock $40 million 
B) debit Cash $40 million,credit Common Stock $9 million and credit Paid-in Capital in Excess of Par-Common $31 million 
C) debit Cash $40 million,credit Common Stock $9 million and credit Paid-in Capital in Excess of Stated Value-Common $31 million 
D) debit Cash $40 million and credit Retained Earnings $40 million

Question 12

A stock split:

Accepted Answer

A) increases assets and decreases stockholders' equity. 
B) decreases assets and increases stockholders' equity. 
C) increases assets and stockholders' equity. 
D) has no effect on total stockholders' equity. 
A) increases assets and decreases stockholders' equity. 
B) decreases assets and increases stockholders' equity. 
C) increases assets and stockholders' equity. 
D) has no effect on total stockholders' equity.

Question 13

Treasury stock has a:

Accepted Answer

A) debit balance,the opposite of other stockholders' equity accounts. 
B) credit balance,the same as other stockholders' equity accounts. 
C) credit balance,the opposite of other stockholders' equity accounts. 
D) debit balance,the same as other stockholders' equity accounts. 
A) debit balance,the opposite of other stockholders' equity accounts. 
B) credit balance,the same as other stockholders' equity accounts. 
C) credit balance,the opposite of other stockholders' equity accounts. 
D) debit balance,the same as other stockholders' equity accounts.

Question 14

Previously issued stock that a corporation purchases from shareholders is called:

Accepted Answer

A) outstanding stock. 
B) authorized stock. 
C) issued stock. 
D) treasury stock. 
A) outstanding stock. 
B) authorized stock. 
C) issued stock. 
D) treasury stock.

Question 15

A 2-for-1 stock split will decrease total assets.

Accepted Answer

A) True 
 B)False

Question 16

The number of shares of authorized stock of a corporation:

Accepted Answer

A) changes every time stock is sold. 
B) is stated in the charter. 
C) has no limit. 
D) must be recorded as a journal entry. 
A) changes every time stock is sold. 
B) is stated in the charter. 
C) has no limit. 
D) must be recorded as a journal entry.

Question 17

Regarding the retained earnings account,which of the following statements is INCORRECT?

Accepted Answer

A) Net income is the only item that increases retained earnings. 
B) Stock dividends decrease retained earnings. 
C) Other adjustments to retained earnings are usually relatively minor and relatively rare. 
D) Net losses are the only item that decreases retained earnings. 
A) Net income is the only item that increases retained earnings. 
B) Stock dividends decrease retained earnings. 
C) Other adjustments to retained earnings are usually relatively minor and relatively rare. 
D) Net losses are the only item that decreases retained earnings.

Question 18

On December 31 of the current year,Pilozzi Company has the following information available:   On December 31 of the current year,can the Board of Directors declare and pay a cash dividend of $6 million?

Accepted Answer

A) Yes,if they can borrow some money,or liquidate some assets. 
B) No,the cash balance is below $6 million. 
C) No,Retained Earnings is below $6 million. 
D) No,Cash and Retained Earnings are both below $6 million. 
A) Yes,if they can borrow some money,or liquidate some assets. 
B) No,the cash balance is below $6 million. 
C) No,Retained Earnings is below $6 million. 
D) No,Cash and Retained Earnings are both below $6 million.

Question 19

The basic form of capital stock is:

Accepted Answer

A) a share of preferred stock. 
B) a share of common stock. 
C) par value stock. 
D) the corporate charter. 
A) a share of preferred stock. 
B) a share of common stock. 
C) par value stock. 
D) the corporate charter.

Question 20

Buetters Company reports the following information at the current fiscal year end of December 31:   How many shares of common stock are currently issued?

Accepted Answer

A) 9.4 million 
B) 94 million 
C) 994 million 
D) 940 million 
A) 9.4 million 
B) 94 million 
C) 994 million 
D) 940 million

Passed dividends on cumulative preferred stock are recorded as a liability.

If a corporation pays taxes on its income,then the stockholders will not have to pay taxes on the dividends received from that corporation.

On December 31,Copper Corporation has the following data available: What is the leverage ratio? (Round your final answer to two decimal places. )

When treasury stock is purchased,accountants record treasury stock at:

On December 31,Mercury Corporation has the following data available: What is return on equity? (Round your final answer to two decimal places,X.XX%)

When common stock is issued for services provided to the corporation,the corporation usually recognizes an expense for the fair market value of the services provided.

Dividend payments are a type of financing activity because the company is paying stockholders for the use of their money.

On December 31,Sulfur Corporation has the following data available: What is return on assets? (Round your final answer to two decimal places,X.XX%)

Which one of the following is NOT a stockholder's right of ownership in a corporation?

Mews Corporation has the following information reported on the balance sheet as of December 31 of the current year: Based on the information above,how many shares of common stock have been issued?

Paltrowski Company issued 1 million shares of no-par common stock with a stated value of $9.The issue price was $40 per share.Which journal entry is prepared?

A stock split:

Treasury stock has a:

Previously issued stock that a corporation purchases from shareholders is called:

A 2-for-1 stock split will decrease total assets.

The number of shares of authorized stock of a corporation:

Regarding the retained earnings account,which of the following statements is INCORRECT?

On December 31 of the current year,Pilozzi Company has the following information available: On December 31 of the current year,can the Board of Directors declare and pay a cash dividend of $6 million?

The basic form of capital stock is:

Buetters Company reports the following information at the current fiscal year end of December 31: How many shares of common stock are currently issued?

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

Passed dividends on cumulative preferred stock are recorded as a liability.

If a corporation pays taxes on its income,then the stockholders will not have to pay taxes on the dividends received from that corporation.

On December 31,Copper Corporation has the following data available: What is the leverage ratio? (Round your final answer to two decimal places. )

When treasury stock is purchased,accountants record treasury stock at:

On December 31,Mercury Corporation has the following data available: What is return on equity? (Round your final answer to two decimal places,X.XX%)

When common stock is issued for services provided to the corporation,the corporation usually recognizes an expense for the fair market value of the services provided.

Dividend payments are a type of financing activity because the company is paying stockholders for the use of their money.

On December 31,Sulfur Corporation has the following data available: What is return on assets? (Round your final answer to two decimal places,X.XX%)

Which one of the following is NOT a stockholder's right of ownership in a corporation?

Mews Corporation has the following information reported on the balance sheet as of December 31 of the current year: Based on the information above,how many shares of common stock have been issued?

Paltrowski Company issued 1 million shares of no-par common stock with a stated value of $9.The issue price was $40 per share.Which journal entry is prepared?

A stock split:

Treasury stock has a:

Previously issued stock that a corporation purchases from shareholders is called:

A 2-for-1 stock split will decrease total assets.

The number of shares of authorized stock of a corporation:

Regarding the retained earnings account,which of the following statements is INCORRECT?

On December 31 of the current year,Pilozzi Company has the following information available: On December 31 of the current year,can the Board of Directors declare and pay a cash dividend of $6 million?

The basic form of capital stock is:

Buetters Company reports the following information at the current fiscal year end of December 31: How many shares of common stock are currently issued?

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