Question 1

The ability of a corporation to obtain capital is

Accepted Answer

A) less than a partnership. 
B) about the same as a partnership. 
C) restricted because of the limited life of the corporation. 
D) enhanced because of limited liability and ease of share transferability. 
A) less than a partnership. 
B) about the same as a partnership. 
C) restricted because of the limited life of the corporation. 
D) enhanced because of limited liability and ease of share transferability.

Question 2

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 3

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

Accepted Answer

A) True 
 B)False

Question 4

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Accepted Answer

A) True 
 B)False

Question 5

Cash dividends are normally paid on shares of treasury stock.

Accepted Answer

A) True 
 B)False

Question 6

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

Accepted Answer

A) Retained Earnings 
B) Treasury Stock 
C) Organizational Expenses 
D) Common Stock 
A) Retained Earnings 
B) Treasury Stock 
C) Organizational Expenses 
D) Common Stock

Question 7

The par value per share of common stock represents

Accepted Answer

A) the minimum selling price of the stock established by the articles of incorporation. 
B) the minimum amount the stockholder will receive when the corporation is liquidated 
C) an arbitrary amount established in the articles of incorporation 
D) the amount of dividends per share to be received each year 
A) the minimum selling price of the stock established by the articles of incorporation. 
B) the minimum amount the stockholder will receive when the corporation is liquidated 
C) an arbitrary amount established in the articles of incorporation 
D) the amount of dividends per share to be received each year

Question 8

Which of the following statements concerning taxation is accurate?

Accepted Answer

A) Corporations pay federal income taxes but not state income taxes. 
B) Corporations pay federal and state income taxes. 
C) Only the owners must pay taxes on corporate income. 
D) Corporations pay income taxes but their owners do not. 
A) Corporations pay federal income taxes but not state income taxes. 
B) Corporations pay federal and state income taxes. 
C) Only the owners must pay taxes on corporate income. 
D) Corporations pay income taxes but their owners do not.

Question 9

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Accepted Answer

A) True 
 B)False

Question 10

Future Sources,Inc.reported the following results for the year ending July 31,2012:
   
Prepare a retained earnings statement for the fiscal year ended July 31,2012.

Accepted Answer

The answer of Future Sources,Inc.reported the following results for the...

Question 11

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20.What is the amount of revenue realized from the sale?

Accepted Answer

A) $0 
B) $5,000 
C) $2,500 
D) $10,000 
A) $0 
B) $5,000 
C) $2,500 
D) $10,000

Question 12

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

Accepted Answer

A) $7.00 
B) $112.00 
C) $37.50 
D) $600.00 
A) $7.00 
B) $112.00 
C) $37.50 
D) $600.00

Question 13

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A) $670,000 
B) $655,000 
C) $640,000 
D) $565,000 
A) $670,000 
B) $655,000 
C) $640,000 
D) $565,000

Question 14

A restriction/appropriation of retained earnings

Accepted Answer

A) decreases total assets 
B) increases total retained earnings 
C) decreases total retained earnings 
D) has no effect on total retained earnings 
A) decreases total assets 
B) increases total retained earnings 
C) decreases total retained earnings 
D) has no effect on total retained earnings

Question 15

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

Accepted Answer

A) Retained earnings Cash 
B) Cash Dividends payable Cash 
C) Paid-in capital Cash Dividends payable 
D) Cash Dividends Cash Dividends Payable 
A) Retained earnings Cash 
B) Cash Dividends payable Cash 
C) Paid-in capital Cash Dividends payable 
D) Cash Dividends Cash Dividends Payable

Question 16

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Accepted Answer

A) other expense on income statement 
B) intangible asset on balance sheet 
C) stockholders' equity on balance sheet 
D) other income on income statement 
A) other expense on income statement 
B) intangible asset on balance sheet 
C) stockholders' equity on balance sheet 
D) other income on income statement

Question 17

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split.
Required:

Accepted Answer

(1)140,000 shares (3

Question 18

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Accepted Answer

A) $80,000 
B) $10,000 
C) $90,000 
D) $100,000 
A) $80,000 
B) $10,000 
C) $90,000 
D) $100,000

Question 19

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Accepted Answer

A) True 
 B)False

Question 20

When Bayou Corporation was formed on January 1,20xx,the corporate charter provided for 100,000 share of $10 par value common stock.The following transaction was among those engaged in by the corporation during its first month of operation: The corporation issued 9,000 shares of stock at a price of $23 per share.
The entry to record the above transaction would include a

Accepted Answer

A) debit to Cash for $90,000 
B) credit to Common Stock for $207,000 
C) credit to Paid in Capital in Excess of Par for $117,000 
D) debit to Common Stock for $90,000 
A) debit to Cash for $90,000 
B) credit to Common Stock for $207,000 
C) credit to Paid in Capital in Excess of Par for $117,000 
D) debit to Common Stock for $90,000

The ability of a corporation to obtain capital is

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Cash dividends are normally paid on shares of treasury stock.

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

The par value per share of common stock represents

Which of the following statements concerning taxation is accurate?

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Future Sources,Inc.reported the following results for the year ending July 31,2012: Prepare a retained earnings statement for the fiscal year ended July 31,2012.

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20.What is the amount of revenue realized from the sale?

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

What is the total stockholders' equity based on the following account balances?

A restriction/appropriation of retained earnings

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

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split. Required:

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 11: Corporations: Organization, stock Transactions, and Dividends

The ability of a corporation to obtain capital is

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

When the board of director's declares a cash or stock dividend,this action decreases retained earnings.

A sale of treasury stock may result in a decrease in paid-in-capital.All decreases should be charged to the Paid-In-Capital from Sale of Treasury account.

Cash dividends are normally paid on shares of treasury stock.

The term deficit is used to refer to a debit balance in which of the following accounts of a corporation?

The par value per share of common stock represents

Which of the following statements concerning taxation is accurate?

The cost method of accounting for the purchase and sale of treasury stock is a commonly used method.

Future Sources,Inc.reported the following results for the year ending July 31,2012: Prepare a retained earnings statement for the fiscal year ended July 31,2012.

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20.What is the amount of revenue realized from the sale?

A corporation has 50,000 shares of $28 par value stock outstanding that has a current market value of $150.If the corporation issues a 4-for-1 stock split,the market value of the stock will fall to approximately

What is the total stockholders' equity based on the following account balances?

A restriction/appropriation of retained earnings

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

In which section of the financial statements would Paid-In Capital from Sale of Treasury Stock be reported?

Marcos Company,which had 35,000 shares of common stock outstanding,declared a 4-for-1 stock split. Required:

The charter of a corporation provides for the issuance of 100,000 shares of common stock.Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired.What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

A corporation has 10,000 shares of $100 par value stock outstanding.If the corporation issues a 5-for-1 stock split,the number of shares outstanding after the split will be 40,000.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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