Question 1

The board of directors is at the top of a corporate organization chart,followed by the stockholders,then the CEO or president of the corporation.

Accepted Answer

A) True 
 B)False  False

Question 2

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:   Each of the following statements may (or may not)describe one of these technical terms.In the space provided beside each statement,indicate the accounting term described,or answer "None" if the statement does not correctly describe any of the terms.
_____ (a)The type of stock whose owners have little say in management of the corporation and whose annual dividend is limited to a preset amount.
_____ (b)Distribution of cash or other company assets to the owners of a corporation.
_____ (c)An investment banking firm that guarantees an issuing corporation a specific price for a stock issue and then makes a profit by selling the shares to the investing public at a higher price.
_____ (d)Shares of a corporation's stock that have been issued and then reacquired,but not cancelled.
_____ (e)An element of stockholders' equity arising from the profitable operations of a business.
_____ (f)The type of stock most likely to increase dramatically in value if the issuing corporation is extremely successful.
_____ (g)Amounts invested in a corporation by its stockholders.

Accepted Answer

(a)Preferred stock,(b)Dividend,(c)Underwriter,(d)Treasury Stock,(e)Retained earnings,(f)Common stock,(g)Paid-in capital

Question 3

Cash dividends and two classes of stock
Raymond Inc.,has two classes of capital stock outstanding: 25,000 shares of 5%,$100 par value cumulative p

Accepted Answer

$235,000

Question 4

On September 1,2015,Maryland Corporation's common stock was selling at a market price of $200 per share.On that date,Maryland announced a 3 for 2 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

Accepted Answer

A) $100 per share. 
B) $200 per share. 
C) $133.33 per share. 
D) $225 per share. 
A) $100 per share. 
B) $200 per share. 
C) $133.33 per share. 
D) $225 per share.

Question 5

In a corporation's organization chart,who has/have the highest position?

Accepted Answer

A) Stockholders. 
B) Board of directors. 
C) CEO. 
D) President. 
A) Stockholders. 
B) Board of directors. 
C) CEO. 
D) President.

Question 6

Stockholders' equity section of a balance sheet
Shown below are selected account balances from the accounting records of Hyde Corporation at December 31,2015:   Complete the stockholders' equity section using the data provided above:

Accepted Answer

The answer of Stockholders' equity section of a balance sheet
Shown...

Question 7

Thurman Corporation issued 450,000 shares of $.50 par value capital stock at its date of incorporation for cash at a price of $4 per share.During the first year of operations,the company earned $100,000 and declared a dividend of $40,000.At the end of this first year of operations,the balance of the Common Stock account is:

Accepted Answer

A) $1,800,000. 
B) $1,860,000. 
C) $225,000. 
D) $1,820,000. 
A) $1,800,000. 
B) $1,860,000. 
C) $225,000. 
D) $1,820,000.

Question 8

In a "pump-and-dump" scheme,the owners of the company:

Accepted Answer

A) Falsely claim the business has high growth potential. 
B) Artificially raise the price of the stock. 
C) Sell the stock at a high price. 
D) Falsely claim that the business has high growth potential,artificially raise the price of the stock,and sell the stock at a high price. 
A) Falsely claim the business has high growth potential. 
B) Artificially raise the price of the stock. 
C) Sell the stock at a high price. 
D) Falsely claim that the business has high growth potential,artificially raise the price of the stock,and sell the stock at a high price.

Question 9

Factors affecting the market price of stocks
(a)Murdock Corporation has outstanding several different stock issues.For each of the types of stock listed below,briefly describe a situation or circumstance that would cause the market price of that type of stock to increase.
P

Accepted Answer

(a)Preferred stock - Since the market pr

Question 10

Century Corporation issued 400,000 shares of $4 par value common stock at the time of its incorporation.The stock was issued for cash at a price of $16 per share.During the first year of operations,the company sustained a net loss of $100,000.The year-end balance sheet would show the balance of the Common Stock account to be:

Accepted Answer

A) $1,600,000. 
B) $1,500,000. 
C) $6,300,000. 
D) $6,400,000. 
A) $1,600,000. 
B) $1,500,000. 
C) $6,300,000. 
D) $6,400,000.

Question 11

International accounting standards require mandatory redeemable p

Accepted Answer

A) True 
 B)False

Question 12

Treasury stock represents:

Accepted Answer

A) Shares of ownership in the United States Treasury Department. 
B) A current asset. 
C) Authorized shares that have never been issued. 
D) Previously outstanding shares that have been repurchased by the issuing company. 
A) Shares of ownership in the United States Treasury Department. 
B) A current asset. 
C) Authorized shares that have never been issued. 
D) Previously outstanding shares that have been repurchased by the issuing company.

Question 13

Coronet Corp.has total stockholders' equity of $7,400,000.The company's outstanding capital stock includes 100,000 shares of $10 par value common stock and 20,000 shares of 6%,$100 par value p

Accepted Answer

A) $39. 
B) $49. 
C) $54. 
D) $74. 
A) $39. 
B) $49. 
C) $54. 
D) $74.

Question 14

Which of the following is not a right of stockholders?

Accepted Answer

A) To vote for directors and on key issues. 
B) To participate in dividends declared. 
C) To share in the distribution of assets if the corporation is liquidated. 
D) To select the Chief Executive Officer. 
A) To vote for directors and on key issues. 
B) To participate in dividends declared. 
C) To share in the distribution of assets if the corporation is liquidated. 
D) To select the Chief Executive Officer.

Question 15

Which of the following is not an addition to total paid-in-capital?

Accepted Answer

A) Preferred stock. 
B) Common stock. 
C) Preferred stock and treasury stock. 
D) Retained earnings and treasury stock. 
A) Preferred stock. 
B) Common stock. 
C) Preferred stock and treasury stock. 
D) Retained earnings and treasury stock.

Question 16

The market price of a p

Accepted Answer

A) The dividend rate. 
B) The chance that the company will not operate profitably. 
C) The level of interest rates. 
D) The dividend rate,the chance that the company will not operate profitably,and the level of interest rates. 
A) The dividend rate. 
B) The chance that the company will not operate profitably. 
C) The level of interest rates. 
D) The dividend rate,the chance that the company will not operate profitably,and the level of interest rates.

Question 17

Stockholders of a corporation are personally liable for the debts of the corporation if all shares of stock are owned by the officers of the corporation.

Accepted Answer

A) True 
 B)False

Question 18

On September 1,2015,Miami Corporation's common stock was selling at a market price of $25 per share.On that date,Miami announced a 1 for 4 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

Accepted Answer

A) $100. 
B) $25. 
C) $6.25. 
D) $50. 
A) $100. 
B) $25. 
C) $6.25. 
D) $50.

Question 19

The additional paid-in capital account represents profit to the corporation and,as such,it is credited to Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a characteristic of the corporate form of organization?

Accepted Answer

A) The owners of a corporation cannot lose more than the amount of their investment. 
B) Shares of stock in a corporation are more readily transferable than is an interest in a partnership. 
C) Stockholders have authority to decide by majority vote the amount of dividends to be paid. 
D) The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production. 
A) The owners of a corporation cannot lose more than the amount of their investment. 
B) Shares of stock in a corporation are more readily transferable than is an interest in a partnership. 
C) Stockholders have authority to decide by majority vote the amount of dividends to be paid. 
D) The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production.

Exam 11: Stockholders Equity: Paid-In Capital

The board of directors is at the top of a corporate organization chart,followed by the stockholders,then the CEO or president of the corporation.

Cash dividends and two classes of stock Raymond Inc.,has two classes of capital stock outstanding: 25,000 shares of 5%,$100 par value cumulative p

On September 1,2015,Maryland Corporation's common stock was selling at a market price of $200 per share.On that date,Maryland announced a 3 for 2 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

In a corporation's organization chart,who has/have the highest position?

Stockholders' equity section of a balance sheet Shown below are selected account balances from the accounting records of Hyde Corporation at December 31,2015: Complete the stockholders' equity section using the data provided above:

In a "pump-and-dump" scheme,the owners of the company:

Factors affecting the market price of stocks (a)Murdock Corporation has outstanding several different stock issues.For each of the types of stock listed below,briefly describe a situation or circumstance that would cause the market price of that type of stock to increase. P

International accounting standards require mandatory redeemable p

Treasury stock represents:

Coronet Corp.has total stockholders' equity of $7,400,000.The company's outstanding capital stock includes 100,000 shares of $10 par value common stock and 20,000 shares of 6%,$100 par value p

Which of the following is not a right of stockholders?

Which of the following is not an addition to total paid-in-capital?

The market price of a p

Stockholders of a corporation are personally liable for the debts of the corporation if all shares of stock are owned by the officers of the corporation.

On September 1,2015,Miami Corporation's common stock was selling at a market price of $25 per share.On that date,Miami announced a 1 for 4 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

The additional paid-in capital account represents profit to the corporation and,as such,it is credited to Retained Earnings.

Which of the following is not a characteristic of the corporate form of organization?

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Job Order Cost Systems and Overhead Allocations

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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