Question 1

Stock of a closely-held corporation does not trade on a stock exchange.

Accepted Answer

A) True 
 B)False

Question 2

At the end of the accounting period,Isaac Company had a balance of $4,000 in its common stock account,additional paid in capital of $4,000,retained earnings of $3,000,and $1,000 of treasury stock.The total amount of stockholders' equity is:

Accepted Answer

A)  $10,000. 
B)  $13,000. 
C)  $12,000. 
D)  $8,000. 
A)  $10,000. 
B)  $13,000. 
C)  $12,000. 
D)  $8,000.

Question 3

What effect will the declaration of the dividend have on Garrison's financial statements?

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 4

Explain how the equity section of a balance sheet differs among sole proprietorships,partnerships and corporations.

Accepted Answer

a)The equity section of a proprietorship

Question 5

Davis Corporation had 25,000 shares of $10 par value common stock outstanding and declared a two-for-one stock split.How many shares of stock would then be outstanding and what would be the par value of the new stock?

Accepted Answer

50,000 sha

Question 6

Which of the following statements about types of business entities is true?

Accepted Answer

A)  Ownership in a partnership is represented by having shares of capital stock. 
B)  For accounting purposes,a sole proprietorship is not a separate entity from its owner. 
C)  One advantage of corporations is limited liability for stockholders. 
D)  Sole proprietorships are subject to double taxation. 
A)  Ownership in a partnership is represented by having shares of capital stock. 
B)  For accounting purposes,a sole proprietorship is not a separate entity from its owner. 
C)  One advantage of corporations is limited liability for stockholders. 
D)  Sole proprietorships are subject to double taxation.

Question 7

Proprietorships are not separate legal entities; their earnings are taxable to the owners and not to the business itself.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Griggs Company reissued 100 shares of its treasury stock.Griggs had purchased the stock for $25 per share and reissued it for $35 per share.Select the answer that accurately reflects how the reissue of the treasury stock would affect Griggs' financial statements.

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 10

Which describes the stockholders' equity account created when a corporation purchases its own stock and holds it for reissue?

Accepted Answer

A) Treasury stock 
B) Contributed capital in excess of par 
C) Retained earnings 
D) Appropriated retained earnings 
A) Treasury stock 
B) Contributed capital in excess of par 
C) Retained earnings 
D) Appropriated retained earnings

Question 11

Describe cumulative preferred stock.

Accepted Answer

Cumulative preferred stock is stock whos

Question 12

Determine the dollar amount to be transferred from Retained Earnings to paid-in capital accounts as a result of the stock dividend.

Accepted Answer

A)  $95,400 
B)  $111,300 
C)  $900,000 
D)  $1,050,000 
A)  $95,400 
B)  $111,300 
C)  $900,000 
D)  $1,050,000

Question 13

Purchase of treasury stock would be shown on the statement of cash flows as

Accepted Answer

A)  an operating activity. 
B)  an investing activity. 
C)  a financing activity. 
D)  none of these. 
A)  an operating activity. 
B)  an investing activity. 
C)  a financing activity. 
D)  none of these.

Question 14

On September 11,2012,the Hafar Corporation has unrestricted Retained Earnings of $6,000,000,Appropriated Retained Earnings of $4,000,000,Cash of $7,500,000,and Accounts Payable of $500,000.What is the maximum amount that the corporation could use for cash dividends on that date?

Accepted Answer

A)  $7,500,000 
B)  $7,000,000 
C)  $6,000,000 
D)  $5,500,000 
A)  $7,500,000 
B)  $7,000,000 
C)  $6,000,000 
D)  $5,500,000

Question 15

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 16

Fredericksburg Corporation had issued and outstanding 150,000 shares of $8 par value common stock at January 1,2012 with a retained earnings balance of $750,000.Fredericksburg issued a 12% stock dividend to its common shareholders.At the time of the dividend,the market value of the stock was $17 per share.
Required:
a)What is the total dollar amount of the stock dividend?
b)Describe how the stock dividend will affect Fredericksburg's stockholders' equity accounts.
c)How many shares of common stock are outstanding after the stock dividend?

Accepted Answer

a)Stock Dividend: 150,000 shares x 12% =

Question 17

The Securities and Exchange Commission was established in response to the accounting scandals that occurred in 2001 and 2002.

Accepted Answer

A) True 
 B)False

Question 18

A corporation must record a liability for cash dividends on the date of record.

Accepted Answer

A) True 
 B)False

Question 19

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 20

The par value of common stock

Accepted Answer

A)  changes in proportion to market value. 
B)  is not directly related to market value. 
C)  is greater than market value. 
D)  is less than market value. 
A)  changes in proportion to market value. 
B)  is not directly related to market value. 
C)  is greater than market value. 
D)  is less than market value.

Stock of a closely-held corporation does not trade on a stock exchange.

At the end of the accounting period,Isaac Company had a balance of $4,000 in its common stock account,additional paid in capital of $4,000,retained earnings of $3,000,and $1,000 of treasury stock.The total amount of stockholders' equity is:

What effect will the declaration of the dividend have on Garrison's financial statements?

Explain how the equity section of a balance sheet differs among sole proprietorships,partnerships and corporations.

Davis Corporation had 25,000 shares of $10 par value common stock outstanding and declared a two-for-one stock split.How many shares of stock would then be outstanding and what would be the par value of the new stock?

Which of the following statements about types of business entities is true?

Proprietorships are not separate legal entities; their earnings are taxable to the owners and not to the business itself.

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?

Griggs Company reissued 100 shares of its treasury stock.Griggs had purchased the stock for $25 per share and reissued it for $35 per share.Select the answer that accurately reflects how the reissue of the treasury stock would affect Griggs' financial statements.

Which describes the stockholders' equity account created when a corporation purchases its own stock and holds it for reissue?

Describe cumulative preferred stock.

Determine the dollar amount to be transferred from Retained Earnings to paid-in capital accounts as a result of the stock dividend.

Purchase of treasury stock would be shown on the statement of cash flows as

On September 11,2012,the Hafar Corporation has unrestricted Retained Earnings of $6,000,000,Appropriated Retained Earnings of $4,000,000,Cash of $7,500,000,and Accounts Payable of $500,000.What is the maximum amount that the corporation could use for cash dividends on that date?

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

The Securities and Exchange Commission was established in response to the accounting scandals that occurred in 2001 and 2002.

A corporation must record a liability for cash dividends on the date of record.

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

The par value of common stock

An Introduction to Accounting

Understanding the Accounting Cycle

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

Filters

Exam 8: Proprietorships, partnerships, and Corporations

Stock of a closely-held corporation does not trade on a stock exchange.

At the end of the accounting period,Isaac Company had a balance of $4,000 in its common stock account,additional paid in capital of $4,000,retained earnings of $3,000,and $1,000 of treasury stock.The total amount of stockholders' equity is:

What effect will the declaration of the dividend have on Garrison's financial statements?

Explain how the equity section of a balance sheet differs among sole proprietorships,partnerships and corporations.

Davis Corporation had 25,000 shares of $10 par value common stock outstanding and declared a two-for-one stock split.How many shares of stock would then be outstanding and what would be the par value of the new stock?

Which of the following statements about types of business entities is true?

Proprietorships are not separate legal entities; their earnings are taxable to the owners and not to the business itself.

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?

Griggs Company reissued 100 shares of its treasury stock.Griggs had purchased the stock for $25 per share and reissued it for $35 per share.Select the answer that accurately reflects how the reissue of the treasury stock would affect Griggs' financial statements.

Which describes the stockholders' equity account created when a corporation purchases its own stock and holds it for reissue?

Describe cumulative preferred stock.

Determine the dollar amount to be transferred from Retained Earnings to paid-in capital accounts as a result of the stock dividend.

Purchase of treasury stock would be shown on the statement of cash flows as

On September 11,2012,the Hafar Corporation has unrestricted Retained Earnings of $6,000,000,Appropriated Retained Earnings of $4,000,000,Cash of $7,500,000,and Accounts Payable of $500,000.What is the maximum amount that the corporation could use for cash dividends on that date?

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

The Securities and Exchange Commission was established in response to the accounting scandals that occurred in 2001 and 2002.

A corporation must record a liability for cash dividends on the date of record.

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

The par value of common stock

An Introduction to Accounting

Understanding the Accounting Cycle

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

Filters