Question 1

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Accepted Answer

A) True 
 B)False

Question 2

Par value

Accepted Answer

A) is established for a share of stock after it is issued. 
B) is the legal capital established for a share of stock. 
C) represents what a share of stock is worth. 
D) represents the original selling price for a share of stock. 
A) is established for a share of stock after it is issued. 
B) is the legal capital established for a share of stock. 
C) represents what a share of stock is worth. 
D) represents the original selling price for a share of stock.

Question 3

Holders of preferred stock normally do not have

Accepted Answer

A) preference as to dividends. 
B) preference as to assets in liquidations. 
C) full voting rights. 
D) ownership interests in the corporation. 
A) preference as to dividends. 
B) preference as to assets in liquidations. 
C) full voting rights. 
D) ownership interests in the corporation.

Question 4

A corporation records a dividend-related liability

Accepted Answer

A) on the payment date. 
B) on the record date. 
C) on the declaration date. 
D) when the stock sells ex-dividend. 
A) on the payment date. 
B) on the record date. 
C) on the declaration date. 
D) when the stock sells ex-dividend.

Question 5

Dividends in arrears must be paid when a corporation calls in its preferred stock.

Accepted Answer

A) True 
 B)False

Question 6

Draw two distinctions between accounting for a stock split and accounting for a stock dividend.

Accepted Answer

A stock dividend requires a transfer fro

Question 7

One aspect of the corporate form can be considered both an advantage and a disadvantage.What aspect is this,and why can it be considered both?

Accepted Answer

Limited liability can be considered both

Question 8

The information that follows pertains to stockholders' equity data of Frame Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.

Accepted Answer

a.30,000 shares ($300,000 @#LAT-DLM&  $1

Question 9

The following information relates to the number of common shares of the Swan Corporation:
140,000 Authorized shares 60,000 Unissued shares 8,000 Treasury shares
Calculate the number of outstanding shares from the information given.Show your calculations.

Accepted Answer

72,000 shares outsta

Question 10

The account Common Stock Distributable is classified as a current liability.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following has an effect on total stockholders' equity?

Accepted Answer

A) Conversion of preferred stock into common stock 
B) Cash dividend 
C) Stock dividend 
D) Stock split 
A) Conversion of preferred stock into common stock 
B) Cash dividend 
C) Stock dividend 
D) Stock split

Question 12

Use the following information to answer the question below. The following transactions involving Cactus Wren Corporation occurred during the year:
Apr. 1  Purchased 2,000 shares of its own preferred stock for $20, the current market price. This is the first transaction involving its own stock engaged in by the company.
May 3  Sold 400 of the shares purchased on April 1 for $25 per share.
June 5  Retired 600 of the shares purchased on April 1. The original issue price was $10. The par value of the stock is $5.
-The entry to record the May 3 transaction is:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 13

Dividend yield is the most important ratio associated with stockholders' equity and is a common measure of management's performance.

Accepted Answer

A) True 
 B)False

Question 14

A small stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the market value of the stock.

Accepted Answer

A) True 
 B)False

Question 15

All of the following are stockholders' equity accounts except

Accepted Answer

A) Treasury Stock. 
B) Preferred Stock. 
C) Retained Earnings. 
D) Dividends Payable. 
A) Treasury Stock. 
B) Preferred Stock. 
C) Retained Earnings. 
D) Dividends Payable.

Question 16

The following facts pertain to the stockholders' equity section of the balance sheet of Avenida Corporation:
  
During 20x5,Avenida declared and distributed a stock dividend.Also during 20x5,Avenida declared and paid cash dividends of $17,000.There were no changes in the number of shares of stock issued and outstanding during the period except for the change caused by the stock dividend.Calculate the amount of net income reported by Avenida for 20x5.

Accepted Answer

$37,400 [178,500 - (

Question 17

Match between columns
                        Premises: Total contributed capital
Total retained earnings
Total number of shares outstanding
Par value per share
Assets
Balance of Common Stock account
Total stockholders' equity

Accepted Answer

The Answer of no effect and decrease and increase is...

Question 18

The Additional Paid-in Capital account normally arises in the accounting records when

Accepted Answer

A) the number of shares issued exceeds par value. 
B) the stated value of capital stock is greater than the par value. 
C) the market value of the stock rises above par value. 
D) capital stock is issued at an amount greater than par value. 
A) the number of shares issued exceeds par value. 
B) the stated value of capital stock is greater than the par value. 
C) the market value of the stock rises above par value. 
D) capital stock is issued at an amount greater than par value.

Question 19

Which of the following is the appropriate entry to record the declaration of cash dividends?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 20

Treasury stock is considered a reduction in stockholders' equity,not a purchase of assets .

Accepted Answer

A) True 
 B)False

Exam 12: Stockholders Equity

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Par value

Holders of preferred stock normally do not have

A corporation records a dividend-related liability

Dividends in arrears must be paid when a corporation calls in its preferred stock.

Draw two distinctions between accounting for a stock split and accounting for a stock dividend.

One aspect of the corporate form can be considered both an advantage and a disadvantage.What aspect is this,and why can it be considered both?

The information that follows pertains to stockholders' equity data of Frame Corporation on December 31,20x5.Compute the amount of each item indicated by a letter in the listing below.

The following information relates to the number of common shares of the Swan Corporation: 140,000 Authorized shares 60,000 Unissued shares 8,000 Treasury shares Calculate the number of outstanding shares from the information given.Show your calculations.

The account Common Stock Distributable is classified as a current liability.

Which of the following has an effect on total stockholders' equity?

Dividend yield is the most important ratio associated with stockholders' equity and is a common measure of management's performance.

A small stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the market value of the stock.

All of the following are stockholders' equity accounts except

The Additional Paid-in Capital account normally arises in the accounting records when

Which of the following is the appropriate entry to record the declaration of cash dividends?

Treasury stock is considered a reduction in stockholders' equity,not a purchase of assets .

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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