Question 1

On which of the following dates involving stock dividends does a liability arise?

Accepted Answer

A) Date of distribution 
B) Date of declaration 
C) Date of record 
D) On no date 
A) Date of distribution 
B) Date of declaration 
C) Date of record 
D) On no date D

Question 2

The date on a statement of stockholders' equity is for a specific point in time.

Accepted Answer

A) True 
 B)False  False

Question 3

Stockholders elect the board of directors who then appoint the officers of a corporation.

Accepted Answer

A) True 
 B)False  True

Question 4

In the rare instance when a par value stock is issued at a cash price below par,the excess of the par value over the amount of cash received should be

Accepted Answer

A) credited to a liability account. 
B) debited to the Retained Earnings account. 
C) debited to an account titled Discount on Capital Stock. 
D) credited to the Retained Earnings account. 
A) credited to a liability account. 
B) debited to the Retained Earnings account. 
C) debited to an account titled Discount on Capital Stock. 
D) credited to the Retained Earnings account.

Question 5

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following classifications represents the largest number of shares?

Accepted Answer

A) Authorized shares. 
B) Outstanding shares. 
C) Treasury shares. 
D) Issued shares. 
A) Authorized shares. 
B) Outstanding shares. 
C) Treasury shares. 
D) Issued shares.

Question 7

All of the following would appear on the statement of stockholders' equity except

Accepted Answer

A) declaration of cash dividends. 
B) an issuance of common stock. 
C) net income. 
D) declaration of a stock split. 
A) declaration of cash dividends. 
B) an issuance of common stock. 
C) net income. 
D) declaration of a stock split.

Question 8

A stock split results in a transfer of the market value of the stock from Retained Earnings to Contributed Capital.

Accepted Answer

A) True 
 B)False

Question 9

When common stock is issued by a corporation for a cash price above par value,the excess of the cash proceeds over the par value should be reported in the financial statements as a component of

Accepted Answer

A) retained earnings on the balance sheet. 
B) total liabilities on the balance sheet. 
C) operating income on the income statement. 
D) total contributed capital on the balance sheet. 
A) retained earnings on the balance sheet. 
B) total liabilities on the balance sheet. 
C) operating income on the income statement. 
D) total contributed capital on the balance sheet.

Question 10

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

Accepted Answer

A) Common Stock account. 
B) Retained Earnings account. 
C) Additional Paid-in Capital. 
D) Treasury Stock. 
A) Common Stock account. 
B) Retained Earnings account. 
C) Additional Paid-in Capital. 
D) Treasury Stock.

Question 11

Which of the following could be described as both an advantage and a disadvantage of incorporation?

Accepted Answer

A) Continuous existence 
B) Limited liability 
C) Double taxation 
D) Lack of mutual agency 
A) Continuous existence 
B) Limited liability 
C) Double taxation 
D) Lack of mutual agency

Question 12

A disadvantage of the corporate form of business is

Accepted Answer

A) centralized authority and responsibility. 
B) its status as a separate legal entity. 
C) government regulation. 
D) continuous existence. 
A) centralized authority and responsibility. 
B) its status as a separate legal entity. 
C) government regulation. 
D) continuous existence.

Question 13

A corporation should account for the declaration of a 10 percent stock dividend by

Accepted Answer

A) transferring from retained earnings to contributed capital an amount equal to the legal capital represented by the dividend shares. 
B) transferring from retained earnings to contributed capital an amount equal to the market value of the dividend shares. 
C) transferring from retained earnings to contributed capital whatever amount the board of directors deems appropriate. 
D) making only a memorandum entry in the general journal. 
A) transferring from retained earnings to contributed capital an amount equal to the legal capital represented by the dividend shares. 
B) transferring from retained earnings to contributed capital an amount equal to the market value of the dividend shares. 
C) transferring from retained earnings to contributed capital whatever amount the board of directors deems appropriate. 
D) making only a memorandum entry in the general journal.

Question 14

The board of directors of Lark Corporation declared a cash dividend of $3.50 per share on 57,000 shares of common stock on June 14,20x5.The dividend is to be paid on July 15,20x5,to shareholders of record on July 1,20x5.The effects of the entry to record the declaration of the dividend on June 14,20x5,are to

Accepted Answer

A) decrease stockholders' equity and increase liabilities. 
B) increase stockholders' equity and increase liabilities. 
C) decrease stockholders' equity and decrease assets. 
D) increase stockholders' equity and decrease assets. 
A) decrease stockholders' equity and increase liabilities. 
B) increase stockholders' equity and increase liabilities. 
C) decrease stockholders' equity and decrease assets. 
D) increase stockholders' equity and decrease assets.

Question 15

A stock split normally increases total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 16

Return on equity is measured in terms of

Accepted Answer

A) days. 
B) times. 
C) a percentage. 
D) dollars. 
A) days. 
B) times. 
C) a percentage. 
D) dollars.

Question 17

When no-par common stock without a stated value is issued for cash,the Common Stock account is credited for an amount equal to the cash proceeds.

Accepted Answer

A) True 
 B)False

Question 18

The value at which one share of stock can be bought or sold is called

Accepted Answer

A) book value. 
B) call value. 
C) par or stated value. 
D) market value. 
A) book value. 
B) call value. 
C) par or stated value. 
D) market value.

Question 19

The contributed capital of a corporation does not include

Accepted Answer

A) additional paid-in capital. 
B) preferred stock. 
C) the stated value of common stock issued. 
D) retained earnings. 
A) additional paid-in capital. 
B) preferred stock. 
C) the stated value of common stock issued. 
D) retained earnings.

Question 20

The net effects on a corporation of the declaration and payment of a cash dividend are to

Accepted Answer

A) increase assets and increase stockholders' equity. 
B) decrease liabilities and decrease stockholders' equity. 
C) decrease assets and decrease stockholders' equity. 
D) increase stockholders' equity and decrease liabilities. 
A) increase assets and increase stockholders' equity. 
B) decrease liabilities and decrease stockholders' equity. 
C) decrease assets and decrease stockholders' equity. 
D) increase stockholders' equity and decrease liabilities.

On which of the following dates involving stock dividends does a liability arise?

The date on a statement of stockholders' equity is for a specific point in time.

Stockholders elect the board of directors who then appoint the officers of a corporation.

In the rare instance when a par value stock is issued at a cash price below par,the excess of the par value over the amount of cash received should be

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Which of the following classifications represents the largest number of shares?

All of the following would appear on the statement of stockholders' equity except

A stock split results in a transfer of the market value of the stock from Retained Earnings to Contributed Capital.

When common stock is issued by a corporation for a cash price above par value,the excess of the cash proceeds over the par value should be reported in the financial statements as a component of

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

Which of the following could be described as both an advantage and a disadvantage of incorporation?

A disadvantage of the corporate form of business is

A corporation should account for the declaration of a 10 percent stock dividend by

A stock split normally increases total stockholders' equity.

Return on equity is measured in terms of

When no-par common stock without a stated value is issued for cash,the Common Stock account is credited for an amount equal to the cash proceeds.

The value at which one share of stock can be bought or sold is called

The contributed capital of a corporation does not include

The net effects on a corporation of the declaration and payment of a cash dividend are to

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 13: Accounting for Corporations

On which of the following dates involving stock dividends does a liability arise?

The date on a statement of stockholders' equity is for a specific point in time.

Stockholders elect the board of directors who then appoint the officers of a corporation.

In the rare instance when a par value stock is issued at a cash price below par,the excess of the par value over the amount of cash received should be

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Which of the following classifications represents the largest number of shares?

All of the following would appear on the statement of stockholders' equity except

A stock split results in a transfer of the market value of the stock from Retained Earnings to Contributed Capital.

When common stock is issued by a corporation for a cash price above par value,the excess of the cash proceeds over the par value should be reported in the financial statements as a component of

The excess of the issuance price over the stated value of a no-par common stock should be credited to the

Which of the following could be described as both an advantage and a disadvantage of incorporation?

A disadvantage of the corporate form of business is

A corporation should account for the declaration of a 10 percent stock dividend by

A stock split normally increases total stockholders' equity.

Return on equity is measured in terms of

When no-par common stock without a stated value is issued for cash,the Common Stock account is credited for an amount equal to the cash proceeds.

The value at which one share of stock can be bought or sold is called

The contributed capital of a corporation does not include

The net effects on a corporation of the declaration and payment of a cash dividend are to

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Supplement: Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Long Term Liabilities

The Statement of Cash Flows

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters