Question 1

Those most responsible for the major policy decisions of a corporation are the

Accepted Answer

A)  stockholders.
B)  board of directors.
C)  management.
D)  employees.E) None of the above
F) A) and B)

Question 2

The journal entry to record the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock.

Accepted Answer

A) True 
 B)False

Question 3

The officer that is generally responsible for maintaining the cash position of the corporation is the

Accepted Answer

A)  controller.
B)  treasurer.
C)  cashier.
D)  internal auditor.E) A) and B)
F) None of the above

Question 4

Treasury shares plus outstanding shares equal

Accepted Answer

A)  authorized stock.
B)  issued stock.
C)  unissued stock.
D)  distributable stock.E) A) and B)
F) None of the above

Question 5

On January 1, Swanson Corporation had 80,000 ordinary shares with a €10 par value outstanding. On March 17, the company declared a 15% share dividend to shareholders of record on March 20. Market value of the shares was €13 on March 17. The shares were distributed on March 30. The entry to record the transaction of March 30 would include a

Accepted Answer

A)  credit to Cash for €120,000.
B)  debit to Ordinary Share Dividends Distributable for €120,000.
C)  credit to Share Premium-Ordinary for €36,000.
D)  debit to Cash Dividends for €36,000.E) A) and C)
F) A) and B)

Question 6

Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 5%, $10 par non-cumulative preferred stock. In 2016, West declared and paid dividends of $4,000. In 2017, West declared and paid dividends of $20,000. How much of the 2017 dividend was distributed to preferred shareholders?

Accepted Answer

A)  $9,000.
B)  $15,000.
C)  $5,000.
D)  None of these answer choices are correct.E) B) and D)
F) None of the above

Question 7

All of the following are normally found in a corporation's stockholders' equity section except

Accepted Answer

A)  dividends in arrears.
B)  common stock.
C)  paid-in capital.
D)  retained earnings.E) A) and B)
F) A) and C)

Question 8

A corporation is not an entity that is separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 9

A corporation must be incorporated in each state in which it does business.

Accepted Answer

A) True 
 B)False

Question 10

Dividends in arrears are liabilities of the corporation.

Accepted Answer

A) True 
 B)False

Question 11

Paid-in capital in excess of stated value would appear on a balance sheet under the category

Accepted Answer

A)  capital stock.
B)  retained earnings.
C)  additional paid-in capital.
D)  contra to stockholders' equity.E) B) and D)
F) A) and B)

Question 12

Which one of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)  Limited liability of stockholders.
B)  Separate legal existence.
C)  Continuous life.
D)  Government regulation.E) A) and B)
F) None of the above

Question 13

The par value of a stock

Accepted Answer

A)  is legally significant.
B)  reflects the most recent market price.
C)  is selected by the SEC.
D)  is indicative of the worth of the stock.E) B) and C)
F) C) and D)

Question 14

A stock split will

Accepted Answer

A)  have no effect on retained earnings.
B)  increase total paid-in capital.
C)  increase the total par value of the stock.
D)  have no effect on the par value per share of stock.E) None of the above
F) All of the above

Question 15

Two classifications appearing in the paid-in capital section of the balance sheet are

Accepted Answer

A)  preferred stock and common stock.
B)  paid-in capital and retained earnings.
C)  capital stock and additional paid-in capital.
D)  capital stock and treasury stock.E) A) and D)
F) B) and C)

Question 16

All of the following statements about preferred stock are true except

Accepted Answer

A)  preferred stock will have a paid-in capital account that is separate from other stock.
B)  preferred stock is presented first on the stockholder's equity section.
C)  preferred stock can be either par value or no-par value.
D)  there can be only one class of preferred stock.E) A) and B)
F) B) and C)

Question 17

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Accepted Answer

A)  Common Stock will be credited for $185,000.
B)  Paid-in Capital in Excess of Par Value will be credited for $210,000.
C)  Paid-in Capital in Excess of Par Value will be credited for $235,000.
D)  Cash will be debited for $210,000.E) A) and B)
F) A) and C)

Question 18

On January 1, Edmiston Corporation had 2,000,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Accepted Answer

A)  Edmiston's Paid-in Capital in Excess of Par Value account increased $1,000,000.
B)  Edmiston's total stockholders' equity was unaffected.
C)  Edmiston's Stock Dividends account increased $3,000,000.
D)  All of these answer choices are correct.E) A) and D)
F) B) and D)

Question 19

A company would not acquire treasury stock

Accepted Answer

A)  in order to reissue shares to officers.
B)  as an asset investment.
C)  in order to increase trading of the company's stock.
D)  to have additional shares available to use in acquisitions of other companies.E) A) and C)
F) A) and B)

Question 20

Treasury stock is a contra stockholders' equity account.

Accepted Answer

A) True 
 B)False

Exam 10: Reporting and Analyzing Stockholders Equity

Paid-in capital in excess of stated value would appear on a balance sheet under the category

Correct Answer
verified

Treasury shares plus outstanding shares equal

Correct Answer
verified

A stock split will

Correct Answer
verified

Dividends in arrears are liabilities of the corporation.

Correct Answer
verified

The par value of a stock

Correct Answer
verified

Two classifications appearing in the paid-in capital section of the balance sheet are

Correct Answer
verified

Correct Answer
verified

All of the following are normally found in a corporation's stockholders' equity section except

Correct Answer
verified

Those most responsible for the major policy decisions of a corporation are the

Correct Answer
verified

All of the following statements about preferred stock are true except

Correct Answer
verified

The journal entry to record the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock.

Correct Answer
verified

Correct Answer
verified

Treasury stock is a contra stockholders' equity account.

Correct Answer
verified

A corporation is not an entity that is separate and distinct from its owners.

Correct Answer
verified

A company would not acquire treasury stock

Correct Answer
verified

A corporation must be incorporated in each state in which it does business.

Correct Answer
verified

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Correct Answer
verified

Which one of the following would not be considered an advantage of the corporate form of organization?

Correct Answer
verified

The officer that is generally responsible for maintaining the cash position of the corporation is the

Correct Answer
verified

On January 1, Edmiston Corporation had 2,000,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Correct Answer
verified

Exam 10: Reporting and Analyzing Stockholders Equity

Paid-in capital in excess of stated value would appear on a balance sheet under the category

Correct AnswerverifiedShow Answer

Treasury shares plus outstanding shares equal

Correct AnswerverifiedShow Answer

A stock split will

Correct AnswerverifiedShow Answer

Dividends in arrears are liabilities of the corporation.

Correct AnswerverifiedShow Answer

The par value of a stock

Correct AnswerverifiedShow Answer

Two classifications appearing in the paid-in capital section of the balance sheet are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following are normally found in a corporation's stockholders' equity section except

Correct AnswerverifiedShow Answer

Those most responsible for the major policy decisions of a corporation are the

Correct AnswerverifiedShow Answer

All of the following statements about preferred stock are true except

Correct AnswerverifiedShow Answer

The journal entry to record the purchase of treasury stock will cause total stockholders' equity to decrease by the amount of the cost of the treasury stock.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Treasury stock is a contra stockholders' equity account.

Correct AnswerverifiedShow Answer

A corporation is not an entity that is separate and distinct from its owners.

Correct AnswerverifiedShow Answer

A company would not acquire treasury stock

Correct AnswerverifiedShow Answer

A corporation must be incorporated in each state in which it does business.

Correct AnswerverifiedShow Answer

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Correct AnswerverifiedShow Answer

Which one of the following would not be considered an advantage of the corporate form of organization?

Correct AnswerverifiedShow Answer

The officer that is generally responsible for maintaining the cash position of the corporation is the

Correct AnswerverifiedShow Answer

On January 1, Edmiston Corporation had 2,000,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Correct AnswerverifiedShow Answer

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