Question 1

What's so "preferred" about preferred stocks?

Accepted Answer

Most preferred stocks do not have voting

Question 2

Which of the following best describes retained earnings?

Accepted Answer

A) Cash available for dividends. 
B) The amount initially invested in the business by stockholders. 
C) Cash available for expansion and growth. 
D) Income that has been reinvested in the business rather than distributed as dividends to stockholders. 
A) Cash available for dividends. 
B) The amount initially invested in the business by stockholders. 
C) Cash available for expansion and growth. 
D) Income that has been reinvested in the business rather than distributed as dividends to stockholders.

Question 3

A stockholders' subsidiary ledger will have entries made for each stockholder showing the number of shares held.

Accepted Answer

A) True 
 B)False

Question 4

In the Stockholders' Equity section of a balance sheet,par value of common stock is presented first,followed by par value of p

Accepted Answer

A) True 
 B)False

Question 5

Mayfair Corporation has outstanding 70,000 shares of $1 par value common stock as well as 20,000 shares of 7%,$100 par value cumulative p

Accepted Answer

A) $1,080,000. 
B) $1,670,000. 
C) $890,000. 
D) $310,000. 
A) $1,080,000. 
B) $1,670,000. 
C) $890,000. 
D) $310,000.

Question 6

When a corporation issues capital stock at a price higher than the par value:

Accepted Answer

A) The amount received over par value increases retained earnings. 
B) The entire issue price is credited to the Capital Stock account. 
C) The amount received in excess of par value constitutes profit to the issuing corporation. 
D) The amount received in excess of par value becomes part of paid-in capital. 
A) The amount received over par value increases retained earnings. 
B) The entire issue price is credited to the Capital Stock account. 
C) The amount received in excess of par value constitutes profit to the issuing corporation. 
D) The amount received in excess of par value becomes part of paid-in capital.

Question 7

If a corporation has only common stock outstanding,which of the following constitutes legal capital at a particular date?

Accepted Answer

A) The amount in the Common Stock account. 
B) The sum of the Common Stock account and any additional paid-in capital. 
C) The total amount of stockholders' equity. 
D) The sum of the Common Stock account and retained earnings. 
A) The amount in the Common Stock account. 
B) The sum of the Common Stock account and any additional paid-in capital. 
C) The total amount of stockholders' equity. 
D) The sum of the Common Stock account and retained earnings.

Question 8

The most important factor affecting the market price of common stock is the stated dividend rate.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following individuals has the most power to influence corporate policy on a long-term basis?

Accepted Answer

A) A shareholder owning 60% of the outstanding common stock. 
B) A shareholder owning 80% of the outstanding preferred stock. 
C) The treasurer of the corporation. 
D) The controller of the corporation. 
A) A shareholder owning 60% of the outstanding common stock. 
B) A shareholder owning 80% of the outstanding preferred stock. 
C) The treasurer of the corporation. 
D) The controller of the corporation.

Question 10

Prepare a stockholders' equity section
When Haven Corporation was incorporated in 2013,authorization was obtained to issue 200,000 shares of $5 par value common stock and 6,000 shares of 8% cumulative p

Accepted Answer

The answer of Prepare a stockholders' equity section
When Haven Corporation...

Question 11

All of the following are activities seen in "pump-and-dump" schemes except:

Accepted Answer

A) The owners of the company purchase their shares at artificially high prices. 
B) High-pressure sales tactics are used to get individuals to buy the stock. 
C) Limited financial information is filed with the SEC. 
D) The owners of the company claim that a previously private company has high growth potential. 
A) The owners of the company purchase their shares at artificially high prices. 
B) High-pressure sales tactics are used to get individuals to buy the stock. 
C) Limited financial information is filed with the SEC. 
D) The owners of the company claim that a previously private company has high growth potential.

Question 12

The term paid-in capital means:

Accepted Answer

A) All assets other than retained earnings. 
B) Legal capital plus retained earnings. 
C) Total stockholders' equity minus retained earnings. 
D) Legal capital minus retained earnings. 
A) All assets other than retained earnings. 
B) Legal capital plus retained earnings. 
C) Total stockholders' equity minus retained earnings. 
D) Legal capital minus retained earnings.

Question 13

Which of the following does not appear in a corporate income statement?

Accepted Answer

A) Gains and losses from treasury stock transactions. 
B) Income tax expense. 
C) The income or loss from a segment of the business that has been discontinued during the current year. 
D) Gains and losses not expected to recur in the foreseeable future. 
A) Gains and losses from treasury stock transactions. 
B) Income tax expense. 
C) The income or loss from a segment of the business that has been discontinued during the current year. 
D) Gains and losses not expected to recur in the foreseeable future.

Question 14

Determining book value per share
Shown below is information relating to the stockholders' equity of Churchill,Inc.:   From the above information,compute the following:
(a)Number of shares of p

Accepted Answer

(a)12,000 shares (b)

Question 15

If capital stock is issued by a corporation at a price lower than par value,the difference represents a loss in the period in which the shares of stock are issued.

Accepted Answer

A) True 
 B)False

Question 16

Prepare the stockholders' equity section from transaction data.
Shown below is the stockholders' equity section of Farrell Corporation's balance sheet at December 31,2014:   In 2015,the following events occurred:
Farrell Corporation issued 1,000 shares of $3 par common stock in exchange for land.Although several real estate appraisers disagree on the value of the land,Farrell's stock is currently selling on a stock exchange for $32 per share.
Farrell Corporation issued 3,000 shares of 5% cumulative p

Accepted Answer

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

Question 17

Book value per share of preferred stock is computed as total stockholders' equity less the amount assigned to common stock plus any dividends in arrears divided by the number of shares of preferred stock outstanding.

Accepted Answer

A) True 
 B)False

Question 18

The relationship between book value and market price of capital stock is a measure of investors' confidence in a company's management.

Accepted Answer

A) True 
 B)False

Question 19

A stock split will normally increase the market price of the stock and decrease the number of shares on the market.

Accepted Answer

A) True 
 B)False

Question 20

Book value per share and other computations
Shown below is information relating to the stockholders' equity of Silver Waste Management at December 31,2015:   (a)Silver's total legal capital at December 31,2015,is $_______________.
(b)The total amount of Silver's paid-in capital at December 31,2015,is $_________________.
(c)The average issue price per share of Silver's p

Accepted Answer

(a)$900,000 + $2,600,000 = $3,500,000 to

Exam 11: Stockholders Equity: Paid-In Capital

What's so "preferred" about preferred stocks?

Which of the following best describes retained earnings?

A stockholders' subsidiary ledger will have entries made for each stockholder showing the number of shares held.

In the Stockholders' Equity section of a balance sheet,par value of common stock is presented first,followed by par value of p

Mayfair Corporation has outstanding 70,000 shares of $1 par value common stock as well as 20,000 shares of 7%,$100 par value cumulative p

When a corporation issues capital stock at a price higher than the par value:

If a corporation has only common stock outstanding,which of the following constitutes legal capital at a particular date?

The most important factor affecting the market price of common stock is the stated dividend rate.

Which of the following individuals has the most power to influence corporate policy on a long-term basis?

Prepare a stockholders' equity section When Haven Corporation was incorporated in 2013,authorization was obtained to issue 200,000 shares of $5 par value common stock and 6,000 shares of 8% cumulative p

All of the following are activities seen in "pump-and-dump" schemes except:

The term paid-in capital means:

Which of the following does not appear in a corporate income statement?

Determining book value per share Shown below is information relating to the stockholders' equity of Churchill,Inc.: From the above information,compute the following: (a)Number of shares of p

If capital stock is issued by a corporation at a price lower than par value,the difference represents a loss in the period in which the shares of stock are issued.

Book value per share of preferred stock is computed as total stockholders' equity less the amount assigned to common stock plus any dividends in arrears divided by the number of shares of preferred stock outstanding.

The relationship between book value and market price of capital stock is a measure of investors' confidence in a company's management.

A stock split will normally increase the market price of the stock and decrease the number of shares on the market.

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

Filters