Question 1

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

Accepted Answer

A)  the number of shares of common stock outstanding 
B)  the number of shares of common stock issued 
C)  the number of shares of common stock authorized 
D)  all of the above 
A)  the number of shares of common stock outstanding 
B)  the number of shares of common stock issued 
C)  the number of shares of common stock authorized 
D)  all of the above

Question 2

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

Accepted Answer

A)  $25 
B)  $150 
C)  $5 
D)  $30 
A)  $25 
B)  $150 
C)  $5 
D)  $30

Question 3

The primary purpose of a stock split is to

Accepted Answer

A)  increase paid-in capital 
B)  reduce the market price of the stock per share 
C)  increase the market price of the stock per share 
D)  increase retained earnings 
A)  increase paid-in capital 
B)  reduce the market price of the stock per share 
C)  increase the market price of the stock per share 
D)  increase retained earnings

Question 4

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 5

Vincent Corporation has 100,000 share of $100 par common stock outstanding. On June 30, Vincent Corporation declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $132 a share on June 30. Journalize the entries required on June 30, July 15 and July 30.

Accepted Answer

The answer of Vincent Corporation has 100,000 share of $100...

Question 6

Which one of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)  Government regulation 
B)  Separate legal existence 
C)  Continuous life 
D)  Limited liability of stockholders 
A)  Government regulation 
B)  Separate legal existence 
C)  Continuous life 
D)  Limited liability of stockholders

Question 7

The balance in Retained Earnings at the end of the period is created by closing entries.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not true of a corporation?

Accepted Answer

A)  It may enter into binding legal contracts in its own name. 
B)  It may sue and be sued. 
C)  The acts of its owners bind the corporation. 
D)  It may buy, own, and sell property. 
A)  It may enter into binding legal contracts in its own name. 
B)  It may sue and be sued. 
C)  The acts of its owners bind the corporation. 
D)  It may buy, own, and sell property.

Question 9

Par value

Accepted Answer

A)  is the monetary value assigned per share in the corporate charter. 
B)  represents what a share of stock is worth. 
C)  represents the original selling price for a share of stock. 
D)  is established for a share of stock after it is issued. 
A)  is the monetary value assigned per share in the corporate charter. 
B)  represents what a share of stock is worth. 
C)  represents the original selling price for a share of stock. 
D)  is established for a share of stock after it is issued.

Question 10

Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

Accepted Answer

A)  Treasury Stock for $8,500 
B)  Paid-In Capital from Treasury Stock for $8,500 
C)  Paid-In Capital in Excess of Par/Common for $2,900 
D)  Paid-In Capital from Treasury Stock for $2,900 
A)  Treasury Stock for $8,500 
B)  Paid-In Capital from Treasury Stock for $8,500 
C)  Paid-In Capital in Excess of Par/Common for $2,900 
D)  Paid-In Capital from Treasury Stock for $2,900

Question 11

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:
   Determine the dividends per share for preferred and common stock for each year.

Accepted Answer

The answer of Sabas Company has 20,000 shares of $100...

Question 12

The par value of common stock must always be equal to its market value on the date the stock is issued.

Accepted Answer

A) True 
 B)False

Question 13

Match the value to the appropriate account. For the year ended 2012 ABC had the following transactions:
- issued 10,000 shares of $2.00 par value common stock for $12.00 per share
- issued 3,000 shares of $50 par value 6% preferred stock for $70 per share
- purchased 1000 shares of previously issued common stock for $15.00 per share
-reported net income of $200,000
- declared and paid a total dividend of $40,000
Assume that retained earnings had a beginning balance of $75,000.

Accepted Answer

The answer of Match the value to the appropriate account....

Question 14

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 15

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

Accepted Answer

A) True 
 B)False

Question 16

Organizational expenses are classified as intangible assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 17

Match the following stockholder's equity concepts to the best answer.

Accepted Answer

The answer of Match the following stockholder's equity concepts to...

Question 18

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to

Accepted Answer

A)  Organizational Expenses 
B)  Goodwill 
C)  Common Stock 
D)  Cash 
A)  Organizational Expenses 
B)  Goodwill 
C)  Common Stock 
D)  Cash

Question 19

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 20

If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4.

Accepted Answer

A) True 
 B)False

Exam 13: Corporations: Organization, Stock Transactions, and Dividends

Which of the following amounts should be disclosed in the stockholders' equity section of the balance sheet?

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

The primary purpose of a stock split is to

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

Which one of the following would not be considered an advantage of the corporate form of organization?

The balance in Retained Earnings at the end of the period is created by closing entries.

Which of the following is not true of a corporation?

Par value

Treasury stock that had been purchased for $5,600 last month was reissued this month for $8,500. The journal entry to record the reissuance would include a credit to

Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Determine the dividends per share for preferred and common stock for each year.

The par value of common stock must always be equal to its market value on the date the stock is issued.

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

A restriction/appropriation of retained earnings establishes cash assets that are set aside for a specific purpose.

Organizational expenses are classified as intangible assets on the balance sheet.

Match the following stockholder's equity concepts to the best answer.

The entry to record the issuance of 150 shares of $5 par common stock at par to an attorney in payment of legal fees for organizing the corporation includes a credit to

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?

If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Filters