Question 1

The directors of a corporation:

Accepted Answer

A) Are hired by the officers to run the business on a day-to-day basis. 
B) May not own stock in the same corporation or be officers of the same corporation. 
C) Are responsible for formulating corporate policy and for hiring corporate officers. 
D) Are elected by the shareholders to run day-to-day operations. 
A) Are hired by the officers to run the business on a day-to-day basis. 
B) May not own stock in the same corporation or be officers of the same corporation. 
C) Are responsible for formulating corporate policy and for hiring corporate officers. 
D) Are elected by the shareholders to run day-to-day operations.

Question 2

Assuming there is no p

Accepted Answer

A) Stockholders' equity divided by the number of shares authorized. 
B) Stockholders' equity divided by the number of shares outstanding. 
C) Net income divided by the number of shares outstanding. 
D) Net income divided by the number of shares authorized. 
A) Stockholders' equity divided by the number of shares authorized. 
B) Stockholders' equity divided by the number of shares outstanding. 
C) Net income divided by the number of shares outstanding. 
D) Net income divided by the number of shares authorized.

Question 3

Treasury stock is stock of a corporation that has been issued and then reacquired and then cancelled.

Accepted Answer

A) True 
 B)False

Question 4

A corporation must always have more than one class of stock.

Accepted Answer

A) True 
 B)False

Question 5

A stock split will decrease the par value per share of the stock.

Accepted Answer

A) True 
 B)False

Question 6

Interest rates impact the market value of common stock more than they impact the market value of p

Accepted Answer

A) True 
 B)False

Question 7

Santa Fe Boat Yard has total stockholders' equity of $4,100,000,comprised of the following: - $2,000,000 in $5 p

Accepted Answer

A) $30.00. 
B) $58.57. 
C) $45.71. 
D) $6.00. 
A) $30.00. 
B) $58.57. 
C) $45.71. 
D) $6.00.

Question 8

The advantages of corporations going public include all of the following except:

Accepted Answer

A) Professional management. 
B) Transferability of ownership. 
C) Limited shareholder liability. 
D) Ability to remove assets. 
A) Professional management. 
B) Transferability of ownership. 
C) Limited shareholder liability. 
D) Ability to remove assets.

Question 9

Prepare the stockholders' equity section from transaction data
Shown below is the stockholders' equity section of Jones' balance sheet at December 31,2015.   In 2015,the following events occurred:
Jones issued 2,000 shares of $5 par value common stock in exchange for legal services relating to the formation of the corporation; value of these services was set at $19,500.
Jones issued 8,000 of its 10,000 authorized shares of $8 cumulative p

Accepted Answer

The answer of Prepare the stockholders' equity section from transaction...

Question 10

The purchase of treasury stock for cash will:

Accepted Answer

A) Increase stockholders' equity. 
B) Not increase nor decrease stockholders' equity. 
C) Decrease stockholders' equity. 
D) Not change total assets. 
A) Increase stockholders' equity. 
B) Not increase nor decrease stockholders' equity. 
C) Decrease stockholders' equity. 
D) Not change total assets.

Question 11

Seville Corporation has net assets of $2,072,000 and paid-in capital of $700,000.The only stock issue consists of 74,000 outstanding shares of common stock.From this information,it can be deduced that the company has:

Accepted Answer

A) Retained earnings of $2,072,000. 
B) A deficit of $2,072,000. 
C) A book value of $9.46 per share of common stock. 
D) A book value of $28 per share of common stock. 
A) Retained earnings of $2,072,000. 
B) A deficit of $2,072,000. 
C) A book value of $9.46 per share of common stock. 
D) A book value of $28 per share of common stock.

Question 12

A primary disadvantage of the corporate form of organization is:

Accepted Answer

A) Unlimited personal liability for business debts. 
B) Ownership is difficult to transfer. 
C) Corporate earnings are subject to double taxation. 
D) Corporation may continue its operations without disruption despite retirement of individual stockholders. 
A) Unlimited personal liability for business debts. 
B) Ownership is difficult to transfer. 
C) Corporate earnings are subject to double taxation. 
D) Corporation may continue its operations without disruption despite retirement of individual stockholders.

Question 13

Treasury stock transactions.
Jackson Corporation engaged in the following treasury stock transactions during the current year:   Complete the following three general journal entries to record these treasury stock transactions.

Accepted Answer

The answer of Treasury stock transactions.
Jackson Corporation engaged in the...

Question 14

Treasury stock should most often be recorded:

Accepted Answer

A) At cost. 
B) Par value. 
C) Fair market value at year end. 
D) Face value. 
A) At cost. 
B) Par value. 
C) Fair market value at year end. 
D) Face value.

Question 15

A corporation continues in existence even if a stockholder dies or withdraws from the organization.

Accepted Answer

A) True 
 B)False

Question 16

Shares that have been sold and are in the hands of stockholders are called:

Accepted Answer

A) Outstanding. 
B) Issued. 
C) Treasury. 
D) Underwritten. 
A) Outstanding. 
B) Issued. 
C) Treasury. 
D) Underwritten.

Question 17

The following two items are disclosed in the stockholders' equity section of Riverside Corporation's December 31,2015,balance sheet:   If the company had reacquired 700 shares of treasury stock in February of 2015,then for what amount was the other treasury stock sold for during 2015?

Accepted Answer

A) $2 per share above its par value. 
B) $2 per share. 
C) $2 per share above its cost. 
D) $22 per share above its cost. 
A) $2 per share above its par value. 
B) $2 per share. 
C) $2 per share above its cost. 
D) $22 per share above its cost.

Question 18

On September 1,2015,Miami Corporation's common stock was selling at a market price of $300 per share.On that date,Miami announced a 2 for 1 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

Accepted Answer

A) $100. 
B) $150. 
C) $200. 
D) $600. 
A) $100. 
B) $150. 
C) $200. 
D) $600.

Question 19

Interpreting the stockholders' equity section
The stockholders' equity section of the balance sheet of Benson Corporation (with certain details omitted)appears below:   Answer the following questions based on the stockholders' equity section given above.
(a)What is the total amount of legal capital?
(b)What is the total amount of dividends paid annually to the p

Accepted Answer

(a)$1,325,000 (b)$42

Question 20

A corporation is a legal entity separate from its owners; it may sue and be sued,but it may not own property in its own name.

Accepted Answer

A) True 
 B)False

Exam 11: Stockholders Equity: Paid-In Capital

The directors of a corporation:

Assuming there is no p

Treasury stock is stock of a corporation that has been issued and then reacquired and then cancelled.

A corporation must always have more than one class of stock.

A stock split will decrease the par value per share of the stock.

Interest rates impact the market value of common stock more than they impact the market value of p

Santa Fe Boat Yard has total stockholders' equity of $4,100,000,comprised of the following: - $2,000,000 in $5 p

The advantages of corporations going public include all of the following except:

The purchase of treasury stock for cash will:

Seville Corporation has net assets of $2,072,000 and paid-in capital of $700,000.The only stock issue consists of 74,000 outstanding shares of common stock.From this information,it can be deduced that the company has:

A primary disadvantage of the corporate form of organization is:

Treasury stock transactions. Jackson Corporation engaged in the following treasury stock transactions during the current year: Complete the following three general journal entries to record these treasury stock transactions.

Treasury stock should most often be recorded:

A corporation continues in existence even if a stockholder dies or withdraws from the organization.

Shares that have been sold and are in the hands of stockholders are called:

The following two items are disclosed in the stockholders' equity section of Riverside Corporation's December 31,2015,balance sheet: If the company had reacquired 700 shares of treasury stock in February of 2015,then for what amount was the other treasury stock sold for during 2015?

On September 1,2015,Miami Corporation's common stock was selling at a market price of $300 per share.On that date,Miami announced a 2 for 1 stock split.At what price would you expect the stock to trade immediately after the split goes into effect?

A corporation is a legal entity separate from its owners; it may sue and be sued,but it may not own property in its own name.

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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