Question 1

Stock options are often used to encourage employees to:

Accepted Answer

A)  Focus on company performance. 
B)  Take a long-run approach. 
C)  Remain with the company. 
D)  None of these. 
E)  All of these. 
A)  Focus on company performance. 
B)  Take a long-run approach. 
C)  Remain with the company. 
D)  None of these. 
E)  All of these.

Question 2

A stock dividend reduces a corporation's assets and its stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 3

A dividend preference for preferred stock means that:

Accepted Answer

A)  Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders. 
B)  Preferred shareholders are guaranteed dividends. 
C)  Dividends are paid quarterly. 
D)  Preferred stockholders prefer dividends more than common stockholders. 
E)  Dividends must be declared on preferred stock. 
A)  Preferred stockholders are allocated their dividends before dividends are allocated to common shareholders. 
B)  Preferred shareholders are guaranteed dividends. 
C)  Dividends are paid quarterly. 
D)  Preferred stockholders prefer dividends more than common stockholders. 
E)  Dividends must be declared on preferred stock.

Question 4

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

Accepted Answer

The price-earnings ratio of a common sto

Question 5

The date the directors vote to pay a dividend is called the:

Accepted Answer

A)  Date of stockholders' meeting. 
B)  Date of declaration. 
C)  Date of record. 
D)  Date of payment. 
E)  Liquidating date. 
A)  Date of stockholders' meeting. 
B)  Date of declaration. 
C)  Date of record. 
D)  Date of payment. 
E)  Liquidating date.

Question 6

A corporation had the following stock outstanding when the company's board of directors declared a $95,000 cash dividend during the current year:   Allocate the cash dividend between the preferred and common stockholders assuming the preferred stock is cumulative and nonparticipating and dividends are one year in arrears.

Accepted Answer

The answer of A corporation had the following stock outstanding...

Question 7

The following data were reported by a corporation:   The number of outstanding shares is:

Accepted Answer

A)  12,000. 
B)  15,000. 
C)  17,000. 
D)  20,000. 
E)  23,000. 
A)  12,000. 
B)  15,000. 
C)  17,000. 
D)  20,000. 
E)  23,000.

Question 8

A corporation issued 300 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

Accepted Answer

A)  A $1,800 credit to Common Stock. 
B)  A $1,500 debit to Organization Expenses. 
C)  A $300 credit to Paid-in Capital in Excess of Par Value, Common Stock. 
D)  A $1,800 debit to Legal Expenses. 
E)  A $1,800 credit to Cash. 
A)  A $1,800 credit to Common Stock. 
B)  A $1,500 debit to Organization Expenses. 
C)  A $300 credit to Paid-in Capital in Excess of Par Value, Common Stock. 
D)  A $1,800 debit to Legal Expenses. 
E)  A $1,800 credit to Cash.

Question 9

When all of the authorized shares have the same rights and characteristics, the stock is called

Accepted Answer

A)  Preferred stock. 
B)  Common stock. 
C)  Par value stock. 
D)  Stated value stock. 
E)  No-par value stock. 
A)  Preferred stock. 
B)  Common stock. 
C)  Par value stock. 
D)  Stated value stock. 
E)  No-par value stock.

Question 10

Stocks that pay large dividends on a regular basis are growth stocks.

Accepted Answer

A) True 
 B)False

Question 11

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Accepted Answer

A) True 
 B)False

Question 12

_________________________ has special rights that give it priority or senior status over common stock in one or more areas such as receiving dividends or for the distribution of assets if the corporation is liquidated.

Accepted Answer

The answer of _________________________ has special rights that give it...

Question 13

Rights to purchase common stock at a fixed price over a specified period are:

Accepted Answer

A)  Preferred stocks. 
B)  Class B stocks. 
C)  Stock options. 
D)  Stock restrictions. 
E)  Preemptive rights. 
A)  Preferred stocks. 
B)  Class B stocks. 
C)  Stock options. 
D)  Stock restrictions. 
E)  Preemptive rights.

Question 14

_____________________ is a class of stock assigned a value by the corporation in its charter.

Accepted Answer

The answer of _____________________ is a class of stock assigned...

Question 15

__________________________ is the annual amount of cash dividends distributed to common shareholders relative to the stock's market price.

Accepted Answer

The answer of __________________________ is the annual amount of cash...

Question 16

Stock that has been issued and is held by stockholders is _________________________ stock.

Accepted Answer

The answer of Stock that has been issued and is...

Question 17

Record the following transactions of a company in general journal form:
(a) Reacquired 8,000 of its own $10 par value common stock at $40 cash per share. The stock was originally issued at $15 per share.
(b) Sold 2,000 shares of the stock reacquired under part (a) at $43 cash per share.
(c) Sold 3,000 shares of the stock reacquired under part (a) at $39 cash per share.

Accepted Answer

The answer of Record the following transactions of a company...

Question 18

If the purchase price of retired stock exceeds the net amount removed from paid-in capital, the excess is debited to Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 19

Common shareholders always share equally with all other shareholders in all dividends.

Accepted Answer

A) True 
 B)False

Question 20

Stated value of no-par stock is:

Accepted Answer

A)  Another name for redemption value. 
B)  An amount assigned to par value stock by the state of incorporation. 
C)  The market value of the stock on the date of issuance. 
D)  The difference between the par value of stock and the amount below or above par value paid-in by the stockholder. 
E)  An amount assigned to no-par stock by the corporation's board of directors. 
A)  Another name for redemption value. 
B)  An amount assigned to par value stock by the state of incorporation. 
C)  The market value of the stock on the date of issuance. 
D)  The difference between the par value of stock and the amount below or above par value paid-in by the stockholder. 
E)  An amount assigned to no-par stock by the corporation's board of directors.

Exam 13: Accounting for Corporations

Stock options are often used to encourage employees to:

A stock dividend reduces a corporation's assets and its stockholders' equity.

A dividend preference for preferred stock means that:

Explain how to calculate the price-earnings ratio and describe how it is used in analysis of a company's financial condition and performance.

The date the directors vote to pay a dividend is called the:

The following data were reported by a corporation: The number of outstanding shares is:

A corporation issued 300 shares of its $5 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

When all of the authorized shares have the same rights and characteristics, the stock is called

Stocks that pay large dividends on a regular basis are growth stocks.

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

_________________________ has special rights that give it priority or senior status over common stock in one or more areas such as receiving dividends or for the distribution of assets if the corporation is liquidated.

Rights to purchase common stock at a fixed price over a specified period are:

_____________________ is a class of stock assigned a value by the corporation in its charter.

__________________________ is the annual amount of cash dividends distributed to common shareholders relative to the stock's market price.

Stock that has been issued and is held by stockholders is _________________________ stock.

If the purchase price of retired stock exceeds the net amount removed from paid-in capital, the excess is debited to Retained Earnings.

Common shareholders always share equally with all other shareholders in all dividends.

Stated value of no-par stock is:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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