Question 1

Will the number of shares of stock issued and the number of shares of stock outstanding always be the same? Why or why not?

Accepted Answer

The number of shares of stock

Question 2

If a corporation decides to reissue, for cash, preferred treasury stock this is which type of transaction type?

Accepted Answer

A)  asset source 
B)  asset use 
C)  asset exchange 
D)  claims exchange 
A)  asset source 
B)  asset use 
C)  asset exchange 
D)  claims exchange

Question 3

Houston Corporation has the following stock outstanding:

Accepted Answer

@#IMG-DLM& In 2014, Houston paid $330,000 in divid

Question 4

Ransom Corporation issued 10,000 shares of $5 par common stock for $22 per share. As a result of this transaction, Ransom's legal capital increased by $50,000.

Accepted Answer

A) True 
 B)False

Question 5

The executives that manage a corporation on a daily business are hired by the company's stockholders.

Accepted Answer

A) True 
 B)False

Question 6

A distribution by a sole proprietorship to the owner is called a dividend.

Accepted Answer

A) True 
 B)False

Question 7

Which answer would represent the financial statement presentation of stockholders equity after the following transactions?
Issued 200 shares of $12 par value common stock for $25 a share. Five hundred shares are authorized. Purchased 75 shares of treasury stock at $22 a share.

Accepted Answer

A) 
  
B) 
Common Stock, $\$ 12$ par value, 500 shares authorized,
$\begin{array}{ll}
200 \text { shares issued and outstanding } & \$ 2,400 \
\text { Paid in Capital in Excess of Par - Common } & \$ 2,600 \
\text { Less: Treasury Stock, 75 shares a \$12 par value } & (\$ 900)
\end{array}$ 
C) 
$$\begin{array}{l}
\text { Common Stock, } \$ 12 \text { par value, } 500 \text { shares authorized, }\
\begin{array} { l c } 
200 \text { shares issued, } 425 \text { outstanding } & \$ 5,100 \
\text { Paid in Capital in Excess of Par - Common } & \$ 5,525 \
\text { Less: Treasury Stock, } 75 \text { shares } a \$ 22 \text { per share } & (\$ 1,650)
\end{array}
\end{array}$$ 
D) 
Common Stock, $\$ 25$ market value, 500 shares authorized, 
$\begin{array}{lc}
200 \text { shares issued, } 125 \text { outstanding } & \$ 5,000 \
\text { Less: Treasury Stock, } 75 \text { shares } a \$ 22 \text { per share } & (\$ 1,650)
\end{array}$ 
A) 
  
B) 
Common Stock, $\$ 12$ par value, 500 shares authorized,
$\begin{array}{ll}
200 \text { shares issued and outstanding } & \$ 2,400 \
\text { Paid in Capital in Excess of Par - Common } & \$ 2,600 \
\text { Less: Treasury Stock, 75 shares a \$12 par value } & (\$ 900)
\end{array}$ 
C) 
$$\begin{array}{l}
\text { Common Stock, } \$ 12 \text { par value, } 500 \text { shares authorized, }\
\begin{array} { l c } 
200 \text { shares issued, } 425 \text { outstanding } & \$ 5,100 \
\text { Paid in Capital in Excess of Par - Common } & \$ 5,525 \
\text { Less: Treasury Stock, } 75 \text { shares } a \$ 22 \text { per share } & (\$ 1,650)
\end{array}
\end{array}$$ 
D) 
Common Stock, $\$ 25$ market value, 500 shares authorized, 
$\begin{array}{lc}
200 \text { shares issued, } 125 \text { outstanding } & \$ 5,000 \
\text { Less: Treasury Stock, } 75 \text { shares } a \$ 22 \text { per share } & (\$ 1,650)
\end{array}$

Question 8

The term "double taxation" refers to which of the following:

Accepted Answer

A)  Sole proprietorships must pay income taxes on their net incomes and the owners are also required to pay income taxes on their withdrawals. 
B)  In a partnership, both partners are required to claim their share of net income on their tax returns. 
C)  Corporations must pay income taxes on their net income and their stockholders pay income tax on the dividends they receive. 
D)  Limited Liability Companies are forced to pay income taxes to both the state and the federal governments. 
A)  Sole proprietorships must pay income taxes on their net incomes and the owners are also required to pay income taxes on their withdrawals. 
B)  In a partnership, both partners are required to claim their share of net income on their tax returns. 
C)  Corporations must pay income taxes on their net income and their stockholders pay income tax on the dividends they receive. 
D)  Limited Liability Companies are forced to pay income taxes to both the state and the federal governments.

Question 9

Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$ 
The stock of the Hamlin Oil Co. was trading at $12 per share on March 27 when the company announced that it had recently discovered a large oil reserve. The stock price immediately went up to $18 per share. The company had 10,000,000 shares outstanding. Indicate the effects of this discovery on Hamlin's financial statements. $\begin{array}{|l|l|l|l|l|l|}
\text { Assets Liabilities } & \text { Equity } & \text { Revenues } & \text { Expenses } & \begin{array}{c}
\text { Net } \
\text { Income }
\end{array} & \begin{array}{c}
\text { Cash } \
\text { Flow }
\end{array}\\hline&&&
\end{array}$

Accepted Answer

The answer of Indicate how each event affects the elements...

Question 10

Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. $$\text { Increase } = \mathrm { I } \quad \text { Decrease } = \mathrm { D } \quad \text { No Effect } = \mathrm { N }$$ 
The Hamilton Corporation began operations by issuing 5,000 shares of $10 stated-value stock at $12. Indicate the effects of this transaction on the financial statements. $\begin{array}{|l|l|l|l|l|l|}
\text { Assets Liabilities } & \text { Equity } & \text { Revenues } & \text { Expenses } & \begin{array}{c}
\text { Net } \
\text { Income }
\end{array} & \begin{array}{c}
\text { Cash } \
\text { Flow }
\end{array}\\hline&&&
\end{array}$

Accepted Answer

The answer of Indicate how each event affects the elements...

Question 11

Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Accepted Answer

A)  A sole proprietorship 
B)  A corporation 
C)  A partnership 
D)  All of these 
A)  A sole proprietorship 
B)  A corporation 
C)  A partnership 
D)  All of these

Question 12

Thad Rives is planning to invest in one of the following companies based on their average performance over the past five years, which is presented below.   If Thad is looking for a growth company (with earnings that are growing rapidly and probably will continue to grow rapidly), which one should he choose?

Accepted Answer

A)  Big Bat, Inc. 
B)  Bug-lite, Inc. 
C)  "Mood-blue, Inc". 
D)  Jones, Inc. 
A)  Big Bat, Inc. 
B)  Bug-lite, Inc. 
C)  "Mood-blue, Inc". 
D)  Jones, Inc.

Question 13

Flynn Corp., which is authorized to issue 25,000 shares of no-par common stock, issued 10,000 shares for $150,000. What effect will this event have on the accounting equation?

Accepted Answer

A)  Increase assets by $375,000 increase, equity by $375,000. 
B)  Increase assets by $150,000, increase net income by $150,000. 
C)  Increase assets by $150,000, increase equity by $150,000. 
D)  Increase assets by $150,000, increase net income by $150,000 and increase assets by $150,000, increase equity by $150,000. 
A)  Increase assets by $375,000 increase, equity by $375,000. 
B)  Increase assets by $150,000, increase net income by $150,000. 
C)  Increase assets by $150,000, increase equity by $150,000. 
D)  Increase assets by $150,000, increase net income by $150,000 and increase assets by $150,000, increase equity by $150,000.

Question 14

What are the characteristics of preferred stock?

Accepted Answer

Preferred stock generally does not carry

Question 15

Which of the following statements historically described the term "par value?"

Accepted Answer

A)  The maximum liability of the investor. 
B)  The amount that must be paid to purchase a share of stock. 
C)  Determined by dividing total stockholder's equity by the number of shares of stock. 
D)  The number of shares currently in the hands of stockholders. 
A)  The maximum liability of the investor. 
B)  The amount that must be paid to purchase a share of stock. 
C)  Determined by dividing total stockholder's equity by the number of shares of stock. 
D)  The number of shares currently in the hands of stockholders.

Question 16

Bridge Corporation decides to issue a 15% stock dividend on 20,000 outstanding shares of $10 stated value common stock. The distribution is made at the time the market value of the stock is $50 a share. How will this transaction affect the company's equity accounts?

Accepted Answer

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

Question 17

Show the effect of a stock dividend on the accounting equation.

Accepted Answer

The answer of Show the effect of a stock dividend...

Question 18

The corporate charter of Llano Corporation authorizes the issuance of 25,000 shares of 5% cumulative preferred stock, $50 par, and 200,000 shares of $10 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows:

Accepted Answer

@#IMG-DLM& Llano declared dividends of $400,000 fo

Question 19

A separate capital account is maintained for each partner in a partnership.

Accepted Answer

A) True 
 B)False

Question 20

Discuss a reason why a corporation might "split" its common stock.

Accepted Answer

A corporation may sp

Will the number of shares of stock issued and the number of shares of stock outstanding always be the same? Why or why not?

If a corporation decides to reissue, for cash, preferred treasury stock this is which type of transaction type?

Houston Corporation has the following stock outstanding:

Ransom Corporation issued 10,000 shares of $5 par common stock for $22 per share. As a result of this transaction, Ransom's legal capital increased by $50,000.

The executives that manage a corporation on a daily business are hired by the company's stockholders.

A distribution by a sole proprietorship to the owner is called a dividend.

Which answer would represent the financial statement presentation of stockholders equity after the following transactions? Issued 200 shares of $12 par value common stock for $25 a share. Five hundred shares are authorized. Purchased 75 shares of treasury stock at $22 a share.

The term "double taxation" refers to which of the following:

Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Flynn Corp., which is authorized to issue 25,000 shares of no-par common stock, issued 10,000 shares for $150,000. What effect will this event have on the accounting equation?

What are the characteristics of preferred stock?

Which of the following statements historically described the term "par value?"

Bridge Corporation decides to issue a 15% stock dividend on 20,000 outstanding shares of $10 stated value common stock. The distribution is made at the time the market value of the stock is $50 a share. How will this transaction affect the company's equity accounts?

Show the effect of a stock dividend on the accounting equation.

The corporate charter of Llano Corporation authorizes the issuance of 25,000 shares of 5% cumulative preferred stock, $50 par, and 200,000 shares of $10 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows:

A separate capital account is maintained for each partner in a partnership.

Discuss a reason why a corporation might "split" its common stock.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters

Exam 8: Proprietorships, Partnerships, and Corporations

Will the number of shares of stock issued and the number of shares of stock outstanding always be the same? Why or why not?

If a corporation decides to reissue, for cash, preferred treasury stock this is which type of transaction type?

Houston Corporation has the following stock outstanding:

Ransom Corporation issued 10,000 shares of $5 par common stock for $22 per share. As a result of this transaction, Ransom's legal capital increased by $50,000.

The executives that manage a corporation on a daily business are hired by the company's stockholders.

A distribution by a sole proprietorship to the owner is called a dividend.

Which answer would represent the financial statement presentation of stockholders equity after the following transactions? Issued 200 shares of $12 par value common stock for $25 a share. Five hundred shares are authorized. Purchased 75 shares of treasury stock at $22 a share.

The term "double taxation" refers to which of the following:

Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Flynn Corp., which is authorized to issue 25,000 shares of no-par common stock, issued 10,000 shares for $150,000. What effect will this event have on the accounting equation?

What are the characteristics of preferred stock?

Which of the following statements historically described the term "par value?"

Bridge Corporation decides to issue a 15% stock dividend on 20,000 outstanding shares of $10 stated value common stock. The distribution is made at the time the market value of the stock is $50 a share. How will this transaction affect the company's equity accounts?

Show the effect of a stock dividend on the accounting equation.

The corporate charter of Llano Corporation authorizes the issuance of 25,000 shares of 5% cumulative preferred stock, $50 par, and 200,000 shares of $10 par common stock. At the end of the current year, the titles and balances of stockholders' equity accounts are as follows:

A separate capital account is maintained for each partner in a partnership.

Discuss a reason why a corporation might "split" its common stock.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Financial Statement Analysis

An Introduction to Management Accounting

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters