Question 1

Net income increases when treasury stock is resold for an amount in excess of the amount paid when the common stock was repurchased.

Accepted Answer

A) True 
 B)False

Question 2

Broadbean Co.had the following amounts on its balance sheet on December 31,2018:   During 2019,Broadbean Co.reported net income of $46,200,declared cash dividends of $31,800,purchased additional treasury stock for $8,400,and experienced a foreign currency translation gain of $3,600.What amount will Broadbean report as total stockholders' equity at December 31,2019 on its statement of stockholders' equity?

Accepted Answer

A) $717,400. 
B) $650,600. 
C) $643,400. 
D) $672,000. 
A) $717,400. 
B) $650,600. 
C) $643,400. 
D) $672,000.

Question 3

Which of the following does not represent a description of shares of stock presented on the balance sheet?

Accepted Answer

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

Question 4

Which of the following statements is not correct?

Accepted Answer

A) Issuance of common stock creates a financing activities cash inflow. 
B) Payment of a common stock cash dividend creates an operating activities cash outflow. 
C) Purchase of treasury stock creates a financing activities cash outflow. 
D) Issuance of preferred stock creates a financing activities cash inflow. 
A) Issuance of common stock creates a financing activities cash inflow. 
B) Payment of a common stock cash dividend creates an operating activities cash outflow. 
C) Purchase of treasury stock creates a financing activities cash outflow. 
D) Issuance of preferred stock creates a financing activities cash inflow.

Question 5

When a company sells its treasury stock,it creates a cash inflow from an investing activity because treasury stock is an investment asset on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 6

Shares which a corporation has the ability to issue,as documented in its charter in the state where incorporated,are outstanding shares of stock.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is false?

Accepted Answer

A) Both stock splits and stock dividends increase the number of common shares issued. 
B) Both stock splits and stock dividends increase the number of common shares outstanding. 
C) Stock splits reallocate amounts between retained earnings and contributed capital accounts. 
D) Both stock splits and stock dividends have the impact of reducing the market price of the stock. 
A) Both stock splits and stock dividends increase the number of common shares issued. 
B) Both stock splits and stock dividends increase the number of common shares outstanding. 
C) Stock splits reallocate amounts between retained earnings and contributed capital accounts. 
D) Both stock splits and stock dividends have the impact of reducing the market price of the stock.

Question 8

RKJ Company has provided the following information: 
• 100,000 shares of $5 par value common stock are authorized
• 70,000 shares have been issued
• 65,000 shares are outstanding
-
Which of the following statements is correct?

Accepted Answer

A) RKJ can issue an additional 30,000 shares of treasury stock. 
B) RKJ has 30,000 shares of treasury stock. 
C) RKJ can resell 5,000 shares of treasury stock. 
D) RKJ can issue an additional 35,000 shares of common stock. 
A) RKJ can issue an additional 30,000 shares of treasury stock. 
B) RKJ has 30,000 shares of treasury stock. 
C) RKJ can resell 5,000 shares of treasury stock. 
D) RKJ can issue an additional 35,000 shares of common stock.

Question 9

Which of the following is a correct statement about cumulative and noncumulative preferred stock?

Accepted Answer

A) They both receive dividends in arrears. 
B) Cumulative stock's undeclared dividends accumulate each year until paid while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. 
C) Cumulative preferred stock is guaranteed to receive its dividends. 
D) Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared while noncumulative stock's undeclared dividends accumulate each year until paid. 
A) They both receive dividends in arrears. 
B) Cumulative stock's undeclared dividends accumulate each year until paid while noncumulative stock's right to receive dividends is forfeited in any year that dividends are not declared. 
C) Cumulative preferred stock is guaranteed to receive its dividends. 
D) Cumulative preferred stock's right to receive dividends is forfeited in any year that dividends are not declared while noncumulative stock's undeclared dividends accumulate each year until paid.

Question 10

On February 1,2018,Cue Company acquired 1,000 shares of its $1 par value stock for $47 per share and held these shares in treasury.On April 10,2019,Cue resold all the treasury shares for $50 per share.Which of the following entries would be recorded when Cue Company resells the shares of treasury stock?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 11

On January 1,2019,the stockholders' equity section of Gibbons Corporation's balance sheet reported the following:
   During 2019,the following selected transactions occurred (assume they occurred in the order given):
   Prepare the stockholders' equity section of the balance sheet as of December 31,2019.

Accepted Answer

@#IMG-DLM& *Retained earnings

Question 12

Which of the following is true about a sole proprietorship?

Accepted Answer

A) The capital account is used to record only the investments of the owner. 
B) The drawing account records distribution of assets to the proprietor. 
C) A sole proprietorship is a separate legal entity from the owner. 
D) A sole proprietorship is subject to a business income tax. 
A) The capital account is used to record only the investments of the owner. 
B) The drawing account records distribution of assets to the proprietor. 
C) A sole proprietorship is a separate legal entity from the owner. 
D) A sole proprietorship is subject to a business income tax.

Question 13

On October 1,2017,Adoll Company acquired 1,000 shares of its $1 par value stock for $44 per share and held these shares in treasury.On March 1,2019,Adoll resold all the treasury shares for $40 per share.Which of the following entries would be recorded when Adoll Company resells the shares of treasury stock?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 14

Which of the following statements correctly describes a treasury stock transaction?

Accepted Answer

A) A treasury stock purchase for less than the amount of the stock's original issue cost results in a decrease in total stockholders' equity. 
B) A treasury stock purchase for less than the amount of the stock's original issue cost results in an increase in total stockholders' equity. 
C) A treasury stock purchase for an amount equal to the amount of the stock's original issue cost results in no change to total stockholders' equity. 
D) A treasury stock purchase for more than the amount of the stock's original issue cost results in an increase in total stockholders' equity. 
A) A treasury stock purchase for less than the amount of the stock's original issue cost results in a decrease in total stockholders' equity. 
B) A treasury stock purchase for less than the amount of the stock's original issue cost results in an increase in total stockholders' equity. 
C) A treasury stock purchase for an amount equal to the amount of the stock's original issue cost results in no change to total stockholders' equity. 
D) A treasury stock purchase for more than the amount of the stock's original issue cost results in an increase in total stockholders' equity.

Question 15

Which of the following journal entries does not reflect the initial cash sale of shares of common stock?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 16

Earnings per share is calculated by dividing net income by the number of outstanding shares of common stock at year-end.

Accepted Answer

A) True 
 B)False

Question 17

CGJ Company has provided the following: 
• 200,000 shares of $5 par value common stock are authorized
• 140,000 shares of common stock were issued for $11 per share
• 130,000 shares are outstanding
Which of the following statements is false?

Accepted Answer

A) Common stock is reported at $700,000 on the balance sheet. 
B) Additional paid-in capital is reported at $840,000 on the balance sheet. 
C) Stockholders' equity decreased $110,000 when the treasury stock was purchased. 
D) There are 10,000 shares of treasury stock. 
A) Common stock is reported at $700,000 on the balance sheet. 
B) Additional paid-in capital is reported at $840,000 on the balance sheet. 
C) Stockholders' equity decreased $110,000 when the treasury stock was purchased. 
D) There are 10,000 shares of treasury stock.

Question 18

Which of the following statements is not correct?

Accepted Answer

A) Cash flow from financing activities increases when treasury shares are resold. 
B) Cash dividends decrease cash flow from financing activities. 
C) Cash flow from investing activities decreases when treasury shares are purchased. 
D) Issuance of new shares of stock increases cash flow from financing activities. 
A) Cash flow from financing activities increases when treasury shares are resold. 
B) Cash dividends decrease cash flow from financing activities. 
C) Cash flow from investing activities decreases when treasury shares are purchased. 
D) Issuance of new shares of stock increases cash flow from financing activities.

Question 19

DRP,Inc.issued 50,000 shares of its own $50 par value preferred stock for cash of $110 per share,and issued 200,000 shares of its no-par common stock for cash of $40 per share.
Prepare the required journal entries for the issuance of each class of stock.

Accepted Answer

The answer of DRP,Inc.issued 50,000 shares of its own $50...

Question 20

Which of the following journal entries is correct when no-par common stock is initially issued for cash?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Net income increases when treasury stock is resold for an amount in excess of the amount paid when the common stock was repurchased.

Which of the following does not represent a description of shares of stock presented on the balance sheet?

Which of the following statements is not correct?

When a company sells its treasury stock,it creates a cash inflow from an investing activity because treasury stock is an investment asset on the balance sheet.

Shares which a corporation has the ability to issue,as documented in its charter in the state where incorporated,are outstanding shares of stock.

Which of the following statements is false?

RKJ Company has provided the following information: • 100,000 shares of $5 par value common stock are authorized • 70,000 shares have been issued • 65,000 shares are outstanding - Which of the following statements is correct?

Which of the following is a correct statement about cumulative and noncumulative preferred stock?

On January 1,2019,the stockholders' equity section of Gibbons Corporation's balance sheet reported the following: During 2019,the following selected transactions occurred (assume they occurred in the order given): Prepare the stockholders' equity section of the balance sheet as of December 31,2019.

Which of the following is true about a sole proprietorship?

Which of the following statements correctly describes a treasury stock transaction?

Which of the following journal entries does not reflect the initial cash sale of shares of common stock?

Earnings per share is calculated by dividing net income by the number of outstanding shares of common stock at year-end.

CGJ Company has provided the following: • 200,000 shares of $5 par value common stock are authorized • 140,000 shares of common stock were issued for $11 per share • 130,000 shares are outstanding Which of the following statements is false?

Which of the following statements is not correct?

DRP,Inc.issued 50,000 shares of its own $50 par value preferred stock for cash of $110 per share,and issued 200,000 shares of its no-par common stock for cash of $40 per share. Prepare the required journal entries for the issuance of each class of stock.

Which of the following journal entries is correct when no-par common stock is initially issued for cash?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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Exam 11: Reporting and Interpreting Stockholders Equity

Net income increases when treasury stock is resold for an amount in excess of the amount paid when the common stock was repurchased.

Which of the following does not represent a description of shares of stock presented on the balance sheet?

Which of the following statements is not correct?

When a company sells its treasury stock,it creates a cash inflow from an investing activity because treasury stock is an investment asset on the balance sheet.

Shares which a corporation has the ability to issue,as documented in its charter in the state where incorporated,are outstanding shares of stock.

Which of the following statements is false?

RKJ Company has provided the following information: • 100,000 shares of $5 par value common stock are authorized • 70,000 shares have been issued • 65,000 shares are outstanding - Which of the following statements is correct?

Which of the following is a correct statement about cumulative and noncumulative preferred stock?

On January 1,2019,the stockholders' equity section of Gibbons Corporation's balance sheet reported the following: During 2019,the following selected transactions occurred (assume they occurred in the order given): Prepare the stockholders' equity section of the balance sheet as of December 31,2019.

Which of the following is true about a sole proprietorship?

Which of the following statements correctly describes a treasury stock transaction?

Which of the following journal entries does not reflect the initial cash sale of shares of common stock?

Earnings per share is calculated by dividing net income by the number of outstanding shares of common stock at year-end.

CGJ Company has provided the following: • 200,000 shares of $5 par value common stock are authorized • 140,000 shares of common stock were issued for $11 per share • 130,000 shares are outstanding Which of the following statements is false?

Which of the following statements is not correct?

DRP,Inc.issued 50,000 shares of its own $50 par value preferred stock for cash of $110 per share,and issued 200,000 shares of its no-par common stock for cash of $40 per share. Prepare the required journal entries for the issuance of each class of stock.

Which of the following journal entries is correct when no-par common stock is initially issued for cash?

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Liabilities

Reporting and Interpreting Bond Securities

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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