Question 1

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 2

One advantage of a corporation is the lack of mutual agency.

Accepted Answer

A) True 
 B)False

Question 3

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 4

A corporation's residual equity is its

Accepted Answer

A) preferred stock. 
B) retained earnings. 
C) common stock. 
D) cash. 
A) preferred stock. 
B) retained earnings. 
C) common stock. 
D) cash.

Question 5

Shares of treasury stock are

Accepted Answer

A) issued shares that have been bought back by the corporation and are being held by the corporation. 
B) shares held by the U.S.Treasury Department. 
C) part of the total outstanding shares but not part of the total issued shares of a corporation. 
D) unissued shares that are held by the treasurer of the corporation. 
A) issued shares that have been bought back by the corporation and are being held by the corporation. 
B) shares held by the U.S.Treasury Department. 
C) part of the total outstanding shares but not part of the total issued shares of a corporation. 
D) unissued shares that are held by the treasurer of the corporation.

Question 6

If there is no change in the number of shares authorized and issued from one year to the next,but there is a change in the number of shares outstanding on those same dates,how would you explain that change?

Accepted Answer

The change can be explained either by th

Question 7

The purpose of a statement of stockholders' equity is to

Accepted Answer

A) disclose the computation of book value per share of stock. 
B) budget the transactions expected to occur during the forthcoming period. 
C) replace the statement of retained earnings. 
D) summarize the changes in the components of stockholders' equity for a period of time. 
A) disclose the computation of book value per share of stock. 
B) budget the transactions expected to occur during the forthcoming period. 
C) replace the statement of retained earnings. 
D) summarize the changes in the components of stockholders' equity for a period of time.

Question 8

A large stock dividend should be recorded on the basis of

Accepted Answer

A) par or stated value. 
B) original issue price. 
C) market value. 
D) cost. 
A) par or stated value. 
B) original issue price. 
C) market value. 
D) cost.

Question 9

Treasury stock usually is recorded at cost when purchased.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Return on equity is measured in terms of

Accepted Answer

A) days. 
B) times. 
C) a percentage. 
D) dollars. 
A) days. 
B) times. 
C) a percentage. 
D) dollars.

Question 12

Limited liability can be viewed as both an advantage and a disadvantage.

Accepted Answer

A) True 
 B)False

Question 13

Start-up and organization costs

Accepted Answer

A) are capitalized,but never amortized. 
B) are capitalized and amortized,usually over five years. 
C) are expensed in the year incurred. 
D) appear on the balance sheet as a current asset. 
A) are capitalized,but never amortized. 
B) are capitalized and amortized,usually over five years. 
C) are expensed in the year incurred. 
D) appear on the balance sheet as a current asset.

Question 14

To form a corporation,most states require persons called underwriters to sign and file it with proper state official.This application contains the articles of incorporation.

Accepted Answer

A) True 
 B)False

Question 15

A disadvantage of the corporate form of business is

Accepted Answer

A) lack of mutual agency. 
B) professional management. 
C) ease of transfer of ownership. 
D) tax treatment. 
A) lack of mutual agency. 
B) professional management. 
C) ease of transfer of ownership. 
D) tax treatment.

Question 16

Use this information to answer the following question. Pinnacle Corporation has 90,000 shares of $10 par value common stock outstanding.The following transactions occurred during the year:
Mar. 17 Declared a 10 percent stock dividend to stockholders of record on March 20. Market value of the stock was $22 on March 17.
Mar. 30 Distributed the stock dividend.
-The entry to record the transaction of March 30 is:

Accepted Answer

A) Common Stock Distributable 90,000 Common Stock 90,000 
B) Common Stock Distributable 90,000 Retained Earnings 108,000
Common Stock 198,000 
C) Common Stock Distributable 198,000 Common Stock 90,000
Additional Paid-in Capital 108,000 
D) Common Stock Distributable 90,000 Cash 90,000 
A) Common Stock Distributable 90,000 Common Stock 90,000 
B) Common Stock Distributable 90,000 Retained Earnings 108,000
Common Stock 198,000 
C) Common Stock Distributable 198,000 Common Stock 90,000
Additional Paid-in Capital 108,000 
D) Common Stock Distributable 90,000 Cash 90,000

Question 17

Which of the following phrases is not descriptive of the corporate form of business?

Accepted Answer

A) Professional management 
B) Continuous existence 
C) Double taxation 
D) Unlimited liability 
A) Professional management 
B) Continuous existence 
C) Double taxation 
D) Unlimited liability

Question 18

At the beginning of 20x5,Spur Corporation had 68,000 shares of $10 par value common stock issued and outstanding.During January 20x5,Spur declared and distributed a 10 percent stock dividend.The market value of Spur's stock was $25 throughout the month of January.The entry to be recorded for the declaration of stock dividend is

Accepted Answer

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

Exam 13: Accounting for Corporations

All of the following are stockholders' equity accounts except

One advantage of a corporation is the lack of mutual agency.

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.

A corporation's residual equity is its

Shares of treasury stock are

If there is no change in the number of shares authorized and issued from one year to the next,but there is a change in the number of shares outstanding on those same dates,how would you explain that change?

The purpose of a statement of stockholders' equity is to

A large stock dividend should be recorded on the basis of

Treasury stock usually is recorded at cost when purchased.

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

Return on equity is measured in terms of

Limited liability can be viewed as both an advantage and a disadvantage.

Start-up and organization costs

To form a corporation,most states require persons called underwriters to sign and file it with proper state official.This application contains the articles of incorporation.

A disadvantage of the corporate form of business is

Which of the following phrases is not descriptive of the corporate form of business?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

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

Accounting for Partnerships

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 and Capital Budgeting

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