Question 1

If the p

Accepted Answer

A) Dividends on preferred stock are guaranteed. 
B) Dividends cannot be declared in an amount less than that stated on the stock certificate. 
C) Preferred stockholders participate in dividends paid in excess of a stated amount on the common shares. 
D) Dividends in arrears must be paid on preferred stock before any dividend can be paid on common stock. 
A) Dividends on preferred stock are guaranteed. 
B) Dividends cannot be declared in an amount less than that stated on the stock certificate. 
C) Preferred stockholders participate in dividends paid in excess of a stated amount on the common shares. 
D) Dividends in arrears must be paid on preferred stock before any dividend can be paid on common stock.

Question 2

A 2-for-1 stock split will:

Accepted Answer

A) Increase the total par value of the stock and increase the number of shares outstanding. 
B) Decrease the total par value of the stock and increase the number of shares outstanding. 
C) Not change the total par value of the stock and increase the number of shares outstanding. 
D) Increase total stockholders' equity. 
A) Increase the total par value of the stock and increase the number of shares outstanding. 
B) Decrease the total par value of the stock and increase the number of shares outstanding. 
C) Not change the total par value of the stock and increase the number of shares outstanding. 
D) Increase total stockholders' equity.

Question 3

Which of the following best describes the relationship between revenue and retained earnings?

Accepted Answer

A) Revenue increases net income,which in turn increases retained earnings. 
B) Revenue represents a cash receipt; retained earnings is an element of stockholders' equity. 
C) Revenue represents the price of goods sold or services rendered; retained earnings represents cash available for paying dividends. 
D) Retained earnings is equal to assets minus expenses. 
A) Revenue increases net income,which in turn increases retained earnings. 
B) Revenue represents a cash receipt; retained earnings is an element of stockholders' equity. 
C) Revenue represents the price of goods sold or services rendered; retained earnings represents cash available for paying dividends. 
D) Retained earnings is equal to assets minus expenses.

Question 4

A 2-for-1 stock split:

Accepted Answer

A) Is accounted for in the same way as a stock dividend. 
B) Increases the number of outstanding shares of common stock,but par value per share remains the same as before the split. 
C) Is recorded by transferring the par value of additional shares from retained earnings to the common stock account. 
D) Should logically cause the market price per share to drop by approximately 50%. 
A) Is accounted for in the same way as a stock dividend. 
B) Increases the number of outstanding shares of common stock,but par value per share remains the same as before the split. 
C) Is recorded by transferring the par value of additional shares from retained earnings to the common stock account. 
D) Should logically cause the market price per share to drop by approximately 50%.

Question 5

Stock that had been issued by a corporation,and later reacquired,is classified as:

Accepted Answer

A) Treasury stock. 
B) Non-participating preferred stock. 
C) Restricted stock. 
D) Issued shares. 
A) Treasury stock. 
B) Non-participating preferred stock. 
C) Restricted stock. 
D) Issued shares.

Question 6

The payment of cash dividends to common stockholders is classified as a financing activity on the statement of cash flows whereas payment of a cash dividend to p

Accepted Answer

A) True 
 B)False

Question 7

Zigma Corporation is authorized to issue 2,000,000 shares of $4 par value capital stock.The corporation issued half the stock for cash at $8 per share,earned $336,000 during the first three months of operation,and declared a cash dividend of $60,000.The total paid-in capital of Zigma Corporation after three months of operation is:

Accepted Answer

A) $7,940,000. 
B) $8,000,000. 
C) $8,276,000. 
D) $8,336,000. 
A) $7,940,000. 
B) $8,000,000. 
C) $8,276,000. 
D) $8,336,000.

Question 8

Stock values
Presented below is an excerpt from the stock listings of a recent issue of the Wall Street Journal.   Answer the following questions based on the information about the Russell Corporation given above:
(a)How many shares of Russell Corporation stock were sold on this day?
(b)If you had purchased 10 shares of Russell Corporation stock at the lowest price of the day,what would be the total price that you would have paid for the stock?
(c)What was the closing price of Russell Corporation Stock on the previous day?
(d)If the board of directors of Russell Corporation increased the amount of the annual dividends to $1.00 per share,what would be the amount of the yield percentage on the stock?

Accepted Answer

(a)1,640 × 100 = 164

Question 9

Treasury stock is stock that is issued and outstanding but not authorized.

Accepted Answer

A) True 
 B)False

Question 10

Prepare journal entries for stockholders' equity transactions
A partial list of the ledger accounts of Skyway Corporation is shown below,followed by a list of transactions.Indicate the accounts that would be debited and credited in recording each transaction.

Accepted Answer

The answer of Prepare journal entries for stockholders' equity transactions
A...

Question 11

When no-par stock is issued:

Accepted Answer

A) The entire amount received is credited to the Additional Paid-in Capital account. 
B) The issue price is credited to the Capital Stock account. 
C) There is no legal capital created because there is no par or stated value. 
D) The transaction usually involves only an exchange for non-cash assets or services,since the stock has no value on the stock exchanges. 
A) The entire amount received is credited to the Additional Paid-in Capital account. 
B) The issue price is credited to the Capital Stock account. 
C) There is no legal capital created because there is no par or stated value. 
D) The transaction usually involves only an exchange for non-cash assets or services,since the stock has no value on the stock exchanges.

Question 12

When par value capital stock is issued,capital stock is credited with the par value of the shares issued,regardless of whether the issuance price is equal to par,more than par,or less than par.

Accepted Answer

A) True 
 B)False

Question 13

Shore and Gardiner each own 10,000 shares of S&G Corporation $12 par value stock which they purchased for $38 per share directly from the corporation.If Shore sells his stock to Gardiner for $475,000:

Accepted Answer

A) Stockholders' equity of S&G Corporation increases. 
B) Assets of S&G Corporation increase. 
C) Stockholders' equity of S&G Corporation decreases. 
D) No account of S&G Corporation is affected. 
A) Stockholders' equity of S&G Corporation increases. 
B) Assets of S&G Corporation increase. 
C) Stockholders' equity of S&G Corporation decreases. 
D) No account of S&G Corporation is affected.

Question 14

The board of directors' primary functions include all of the following except:

Accepted Answer

A) Hiring corporate officers. 
B) Setting officers' salaries. 
C) Declaring dividends. 
D) Transacting corporate business. 
A) Hiring corporate officers. 
B) Setting officers' salaries. 
C) Declaring dividends. 
D) Transacting corporate business.

Question 15

Stockholders' Equity
Blake Corporation has the following accounts on December 31,2015
Common Stock $.25 par,1,000,000 authorized,400,000 issued.
P

Accepted Answer

The answer of Stockholders' Equity
Blake Corporation has the following accounts...

Question 16

When a stockholder sends in a proxy statement to a corporation he or she owns stock in,they grant management the voting rights associated with their shares.

Accepted Answer

A) True 
 B)False

Question 17

The net assets of a corporation are equal to:

Accepted Answer

A) Total assets - total liabilities. 
B) Total assets - retained earnings. 
C) Total assets + total liabilities. 
D) Total assets + retained earnings. 
A) Total assets - total liabilities. 
B) Total assets - retained earnings. 
C) Total assets + total liabilities. 
D) Total assets + retained earnings.

Question 18

Marks Corporation has total stockholders' equity of $7,400,000.The company has outstanding 300,000 shares of $1 par value common stock and 20,000 shares of 8% p

Accepted Answer

A) $9.00. 
B) $24.06. 
C) $24.66. 
D) $18.00. 
A) $9.00. 
B) $24.06. 
C) $24.66. 
D) $18.00.

Question 19

It is illegal for the government to double tax corporate earnings.

Accepted Answer

A) True 
 B)False

Question 20

Most p

Accepted Answer

A) To receive dividends on a preferred basis. 
B) Cumulative dividends. 
C) Voting rights. 
D) Callable at the option of the corporation. 
A) To receive dividends on a preferred basis. 
B) Cumulative dividends. 
C) Voting rights. 
D) Callable at the option of the corporation.

Exam 11: Stockholders Equity: Paid-In Capital

If the p

A 2-for-1 stock split will:

Which of the following best describes the relationship between revenue and retained earnings?

A 2-for-1 stock split:

Stock that had been issued by a corporation,and later reacquired,is classified as:

The payment of cash dividends to common stockholders is classified as a financing activity on the statement of cash flows whereas payment of a cash dividend to p

Treasury stock is stock that is issued and outstanding but not authorized.

Prepare journal entries for stockholders' equity transactions A partial list of the ledger accounts of Skyway Corporation is shown below,followed by a list of transactions.Indicate the accounts that would be debited and credited in recording each transaction.

When no-par stock is issued:

When par value capital stock is issued,capital stock is credited with the par value of the shares issued,regardless of whether the issuance price is equal to par,more than par,or less than par.

Shore and Gardiner each own 10,000 shares of S&G Corporation $12 par value stock which they purchased for $38 per share directly from the corporation.If Shore sells his stock to Gardiner for $475,000:

The board of directors' primary functions include all of the following except:

Stockholders' Equity Blake Corporation has the following accounts on December 31,2015 Common Stock $.25 par,1,000,000 authorized,400,000 issued. P

When a stockholder sends in a proxy statement to a corporation he or she owns stock in,they grant management the voting rights associated with their shares.

The net assets of a corporation are equal to:

Marks Corporation has total stockholders' equity of $7,400,000.The company has outstanding 300,000 shares of $1 par value common stock and 20,000 shares of 8% p

It is illegal for the government to double tax corporate earnings.

Most p

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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