Question 1

Preferred stock that the issuing corporation has the option to retire by paying a specified amount to the preferred stockholders is called:

Accepted Answer

A) Convertible preferred stock. 
B) Callable preferred stock. 
C) Premium stock. 
D) Cumulative preferred stock. 
E) Participating preferred stock. 
A) Convertible preferred stock. 
B) Callable preferred stock. 
C) Premium stock. 
D) Cumulative preferred stock. 
E) Participating preferred stock. B

Question 2

A company issued 60 shares of $100 par value common stock for $7,000 cash.The journal entry to record the issuance is:

Accepted Answer

A) Debit Cash $7,000;credit Common Stock $7,000. 
B) Debit Investment in Common Stock $7,000;credit Cash $7,000. 
C) Debit Cash $7,000;credit Common Stock $6,000;credit Paid-in Capital in Excess of Par Value,Common Stock $1,000. 
D) Debit Common Stock $6,000,debit Investment in Common Stock $1,000;credit Cash $7,000. 
E) Debit Cash $7,000;credit Paid-in Capital in Excess of Par Value,Common Stock $6,000,credit Common Stock $1,000. 
A) Debit Cash $7,000;credit Common Stock $7,000. 
B) Debit Investment in Common Stock $7,000;credit Cash $7,000. 
C) Debit Cash $7,000;credit Common Stock $6,000;credit Paid-in Capital in Excess of Par Value,Common Stock $1,000. 
D) Debit Common Stock $6,000,debit Investment in Common Stock $1,000;credit Cash $7,000. 
E) Debit Cash $7,000;credit Paid-in Capital in Excess of Par Value,Common Stock $6,000,credit Common Stock $1,000. C

Question 3

Corporations issue preferred stock to raise capital without sacrificing control of the corporation and/or to boost the return earned by common shareholders.

Accepted Answer

A) True 
 B)False  True

Question 4

A proxy is:

Accepted Answer

A) A document that delegates a stockholder's voting rights to an agent. 
B) A contractual commitment by an investor to purchase unissued shares of stock. 
C) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. 
D) The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. 
E) An arbitrary amount assigned to no-par stock by the corporation's board of directors. 
A) A document that delegates a stockholder's voting rights to an agent. 
B) A contractual commitment by an investor to purchase unissued shares of stock. 
C) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. 
D) The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. 
E) An arbitrary amount assigned to no-par stock by the corporation's board of directors.

Question 5

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Accepted Answer

A) True 
 B)False

Question 6

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 7

The number of shares that a corporation's charter allows it to sell is the ____________________ stock.

Accepted Answer

The answer of The number of shares that a corporation's...

Question 8

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Accepted Answer

A) Debit Retained Earnings $104,500;credit Common Dividends Payable $104,500. 
B) Debit Common Dividends Payable $104,500;credit Cash $104,500. 
C) Debit Retained Earnings $100,100;credit Common Dividends Payable $100,100. 
D) Debit Common Dividends Payable $100,100;credit Cash $100,100. 
E) Debit Retained Earnings $110,000;credit Common Dividends Payable $110,000. 
A) Debit Retained Earnings $104,500;credit Common Dividends Payable $104,500. 
B) Debit Common Dividends Payable $104,500;credit Cash $104,500. 
C) Debit Retained Earnings $100,100;credit Common Dividends Payable $100,100. 
D) Debit Common Dividends Payable $100,100;credit Cash $100,100. 
E) Debit Retained Earnings $110,000;credit Common Dividends Payable $110,000.

Question 9

Companies report the cost of stock options in the:

Accepted Answer

A) Statement of cash flows. 
B) Balance sheet. 
C) Statement of retained earnings. 
D) Income statement. 
E) No disclosure is required. 
A) Statement of cash flows. 
B) Balance sheet. 
C) Statement of retained earnings. 
D) Income statement. 
E) No disclosure is required.

Question 10

A corporation is a legal entity separate from its owners.

Accepted Answer

A) True 
 B)False

Question 11

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

Accepted Answer

A) True 
 B)False

Question 12

___________________________ are corrections of material errors in prior period financial statements.

Accepted Answer

Prior peri

Question 13

Djarleen Company has 10,000 shares of $10 par preferred stock.It also has 250,000 shares of common stock outstanding,and its total stockholders' equity equals $4,000,000.The book value per common share is:

Accepted Answer

A) $16.67. 
B) $16.00. 
C) $40.00. 
D) $15.60. 
E) $10.00. 
A) $16.67. 
B) $16.00. 
C) $40.00. 
D) $15.60. 
E) $10.00.

Question 14

Stock that was reacquired and is still held by the issuing corporation is called:

Accepted Answer

A) Capital stock. 
B) Treasury stock. 
C) Redeemed stock. 
D) Preferred stock. 
E) Callable stock. 
A) Capital stock. 
B) Treasury stock. 
C) Redeemed stock. 
D) Preferred stock. 
E) Callable stock.

Question 15

A company reported the following stockholders' equity on January 1 of the current year:   Prepare journal entries for the following selected transactions related to this company's stock during the current year:

Accepted Answer

The answer of A company reported the following stockholders' equity...

Question 16

A corporation is responsible for its own acts and debts because it is considered a ____________________________________.

Accepted Answer

separate l

Question 17

The amount of income earned per share of a company's outstanding common stock is known as:

Accepted Answer

A) Restricted retained earnings per share. 
B) Earnings per share. 
C) Continuing operations per share. 
D) Dividends per share. 
E) Book value per share. 
A) Restricted retained earnings per share. 
B) Earnings per share. 
C) Continuing operations per share. 
D) Dividends per share. 
E) Book value per share.

Question 18

A stock dividend does not reduce a corporation's assets or its stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 19

Paid and declared preferred dividends are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 20

The amount assigned per share to stock by the corporation in its charter is the _____________________.

Accepted Answer

The answer of The amount assigned per share to stock...

Exam 13: Accounting for Corporations

Preferred stock that the issuing corporation has the option to retire by paying a specified amount to the preferred stockholders is called:

A company issued 60 shares of $100 par value common stock for $7,000 cash.The journal entry to record the issuance is:

Corporations issue preferred stock to raise capital without sacrificing control of the corporation and/or to boost the return earned by common shareholders.

A proxy is:

Cumulative preferred stock carries the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

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

The number of shares that a corporation's charter allows it to sell is the ____________________ stock.

Fetzer Company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the dividend declaration is:

Companies report the cost of stock options in the:

A corporation is a legal entity separate from its owners.

A proxy is a document that gives a designated agent the right to vote a shareholder's stock.

___________________________ are corrections of material errors in prior period financial statements.

Djarleen Company has 10,000 shares of $10 par preferred stock.It also has 250,000 shares of common stock outstanding,and its total stockholders' equity equals $4,000,000.The book value per common share is:

Stock that was reacquired and is still held by the issuing corporation is called:

A company reported the following stockholders' equity on January 1 of the current year: Prepare journal entries for the following selected transactions related to this company's stock during the current year:

A corporation is responsible for its own acts and debts because it is considered a ____________________________________.

The amount of income earned per share of a company's outstanding common stock is known as:

A stock dividend does not reduce a corporation's assets or its stockholders' equity.

Paid and declared preferred dividends are called dividends in arrears.

The amount assigned per share to stock by the corporation in its charter is the _____________________.

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-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Appendix B: Time Value of Money

Appendix C: Activity-Based Costing

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