Question 1

The date of record is the date that directors vote to pay a cash dividend to shareholders.

Accepted Answer

A) True 
 B)False

Question 2

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration, the dividends account is closed to Retained Earnings at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 3

Match each of the following terms with the appropriate definitions.

Accepted Answer

The answer of Match each of the following terms with...

Question 4

A corporation issued 5,000 $10 par value ordinary shares in exchange for some land with a market value of $60,000. The entry to record this exchange is:

Accepted Answer

A)  Debit Land $60,000; credit Share Capital-Ordinary $50,000; credit Share Premium-Ordinary $10,000. 
B)  Debit Land $60,000; credit Share Capital-Ordinary $60,000. 
C)  Debit Land $50,000; credit Share Capital-Ordinary $50,000. 
D)  Debit Share Capital-Ordinary $50,000; debit Share Premium-Ordinary $10,000; credit Land $60,000. 
E)  Debit Share Capital-Ordinary $60,000; credit Land $60,000. 
A)  Debit Land $60,000; credit Share Capital-Ordinary $50,000; credit Share Premium-Ordinary $10,000. 
B)  Debit Land $60,000; credit Share Capital-Ordinary $60,000. 
C)  Debit Land $50,000; credit Share Capital-Ordinary $50,000. 
D)  Debit Share Capital-Ordinary $50,000; debit Share Premium-Ordinary $10,000; credit Land $60,000. 
E)  Debit Share Capital-Ordinary $60,000; credit Land $60,000.

Question 5

Shares that were reacquired and are still held by the issuing corporation are called:

Accepted Answer

A)  Capital shares. 
B)  Treasury shares. 
C)  Redeemed shares. 
D)  Preference shares. 
E)  Callable shares. 
A)  Capital shares. 
B)  Treasury shares. 
C)  Redeemed shares. 
D)  Preference shares. 
E)  Callable shares.

Question 6

All of the following statements regarding share dividends are except:

Accepted Answer

A)  Directors can use share dividends to keep the market price of the shares affordable. 
B)  Share dividends provide evidence of management's confidence that the company is doing well. 
C)  Share dividends do not reduce assets or equity. 
D)  Share dividends decrease the number of shares outstanding. 
E)  Share dividends transfer a portion of equity from retained earnings to contributed capital. 
A)  Directors can use share dividends to keep the market price of the shares affordable. 
B)  Share dividends provide evidence of management's confidence that the company is doing well. 
C)  Share dividends do not reduce assets or equity. 
D)  Share dividends decrease the number of shares outstanding. 
E)  Share dividends transfer a portion of equity from retained earnings to contributed capital.

Question 7

A corporation is a legal entity separate from its owners.

Accepted Answer

A) True 
 B)False

Question 8

A company has earnings per share of $6.45. Its dividend per share is $0.20, and its market price per share is $80. Its price-earnings ratio equals 12.4.

Accepted Answer

A) True 
 B)False

Question 9

The term revenue reverse is sometimes used for retained earnings.

Accepted Answer

A) True 
 B)False

Question 10

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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

Question 12

Shares that pay relatively large cash dividends on a regular basis are called:

Accepted Answer

A)  Small capital shares. 
B)  Mid capital shares. 
C)  Growth shares. 
D)  Large capital shares. 
E)  Income shares. 
A)  Small capital shares. 
B)  Mid capital shares. 
C)  Growth shares. 
D)  Large capital shares. 
E)  Income shares.

Question 13

The main limitation in using book value per share for share valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 14

The number of shares that a corporation's registration allows it to sell is referred to as:

Accepted Answer

A)  Issued shares. 
B)  Outstanding shares. 
C)  Ordinary shares. 
D)  Preference shares. 
E)  Authorized shares. 
A)  Issued shares. 
B)  Outstanding shares. 
C)  Ordinary shares. 
D)  Preference shares. 
E)  Authorized shares.

Question 15

Changes in accounting estimates are:

Accepted Answer

A)  Considered accounting errors. 
B)  Reported as prior period adjustments. 
C)  Accounted for with a cumulative "catch-up" adjustment. 
D)  Immaterial items. 
E)  Accounted for in current and future periods. 
A)  Considered accounting errors. 
B)  Reported as prior period adjustments. 
C)  Accounted for with a cumulative "catch-up" adjustment. 
D)  Immaterial items. 
E)  Accounted for in current and future periods.

Question 16

is the shareholders' equity applicable to ordinary shares divided by the number of ordinary shares outstanding.

Accepted Answer

Book value

Question 17

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 an ordinary

Question 18

Shares that pay large dividends on a regular basis are growth shares.

Accepted Answer

A) True 
 B)False

Question 19

Holders of have a right to be paid both current and all prior periods' unpaid dividends before any dividend is paid to ordinary shareholders.

Accepted Answer

Cumulative

Question 20

have special rights that give it priority or senior status over ordinary shares 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 have special rights that give it priority...

Exam 13: Accounting for Corporations

The date of record is the date that directors vote to pay a cash dividend to shareholders.

If the dividends account is not recorded as a reduction to Retained Earnings on the date of declaration, the dividends account is closed to Retained Earnings at the end of the accounting period.

Match each of the following terms with the appropriate definitions.

A corporation issued 5,000 $10 par value ordinary shares in exchange for some land with a market value of $60,000. The entry to record this exchange is:

Shares that were reacquired and are still held by the issuing corporation are called:

All of the following statements regarding share dividends are except:

A corporation is a legal entity separate from its owners.

A company has earnings per share of $6.45. Its dividend per share is $0.20, and its market price per share is $80. Its price-earnings ratio equals 12.4.

The term revenue reverse is sometimes used for retained earnings.

The price-earnings ratio is computed by dividing earnings per share by the market price per share.

Shares that pay relatively large cash dividends on a regular basis are called:

The main limitation in using book value per share for share valuation models is the potential difference between recorded value and market value for both assets and liabilities.

The number of shares that a corporation's registration allows it to sell is referred to as:

Changes in accounting estimates are:

is the shareholders' equity applicable to ordinary shares divided by the number of ordinary shares outstanding.

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

Shares that pay large dividends on a regular basis are growth shares.

Holders of have a right to be paid both current and all prior periods' unpaid dividends before any dividend is paid to ordinary shareholders.

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

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

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

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

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