Question 1

Preferred shares that give the shareholders the option of exchanging their preferred shares for common shares at a specified rate are known as

Accepted Answer

A) Participating preferred shares 
B) Callable preferred shares 
C) Cumulative preferred shares 
D) Convertible preferred shares 
E) Noncumulative preferred shares 
A) Participating preferred shares 
B) Callable preferred shares 
C) Cumulative preferred shares 
D) Convertible preferred shares 
E) Noncumulative preferred shares D

Question 2

The equity section of a corporation's balance sheet is called Corporation Equity.

Accepted Answer

A) True 
 B)False  False

Question 3

The par value of a share is

Accepted Answer

A) Another name for the call price of a share 
B) A type of callable share 
C) The market value of the shares on the date of issuance 
D) An unpaid dividend 
E) An arbitrary value a corporation places on each of the corporation's shares 
A) Another name for the call price of a share 
B) A type of callable share 
C) The market value of the shares on the date of issuance 
D) An unpaid dividend 
E) An arbitrary value a corporation places on each of the corporation's shares E

Question 4

If shares are issued for non-cash assets,the assets are always recorded at the current market value of the shares.

Accepted Answer

A) True 
 B)False

Question 5

Profits or losses are recorded in a share capital account.

Accepted Answer

A) True 
 B)False

Question 6

Hex Corporation showed the following amounts in the equity section of its balance sheet at January 1, 2021:
$\begin{array}{|l|r|}
\hline \text { Preferred Shares, } \$ 2 \text { cumulative (in arrears for 2020), 10,000 shares issued } & \$ 500,000 \
\hline \text { Common shares } 40,000 \text { shares issued } & \$ 800,000 \
\hline \text { Retained Earnings } & \$ 500,000 \
\hline
\end{array}$
In 2021: On Jan. 20, 2021, 10,000 common shares were issued for $150,000. On Nov. 1, 2021, Cash dividends of $90,000 were declared. Dividends will be paid on January 18, 2022. On Dec. 31, 2021 Hex reported revenues of $150,000 and expenses of $80,000 for the year.

-What is the amount of dividend per share owing to preferred shareholders?

Accepted Answer

The answer of  Hex Corporation showed the following amounts...

Question 7

Legal costs incurred to get a corporation up and running should be accounted for by debiting

Accepted Answer

A) Retained earnings 
B) Share capital 
C) Organization costs 
D) Cash 
E) Common shares 
A) Retained earnings 
B) Share capital 
C) Organization costs 
D) Cash 
E) Common shares

Question 8

Preferred shares may be issued instead of common shares

Accepted Answer

A) To increase financial leverage 
B) To prevent dilution of voting ownership 
C) To appeal to investors who believe that common shares are too risky 
D) To increase the return earned by common shareholders 
E) All of these 
A) To increase financial leverage 
B) To prevent dilution of voting ownership 
C) To appeal to investors who believe that common shares are too risky 
D) To increase the return earned by common shareholders 
E) All of these

Question 9

The shareholders can vote to pay themselves a dividend.

Accepted Answer

A) True 
 B)False

Question 10

The equity section for the single proprietorship can be called owner's equity because the equity belongs to the owner.The equity section for a corporation can be called shareholders' equity because the equity belongs to a group of owners known as shareholders.

Accepted Answer

A) True 
 B)False

Question 11

Corporations issue preferred shares in order to raise capital without sacrificing control of the corporation and to increase the return earned by common shareholders.

Accepted Answer

A) True 
 B)False

Question 12

Explain the difference between an income statement for a corporation and an income statement for a sole proprietorship,and discuss why the difference arises.

Accepted Answer

The two statements are identical except

Question 13

A preferred share on which the right to receive dividends is lost for any year that the dividends are not declared is a

Accepted Answer

A) Participating preferred share 
B) Callable preferred share 
C) Cumulative preferred share 
D) Convertible preferred share 
E) Noncumulative preferred share 
A) Participating preferred share 
B) Callable preferred share 
C) Cumulative preferred share 
D) Convertible preferred share 
E) Noncumulative preferred share

Question 14

The income of a corporation is taxed twice,first as corporate income and then as personal income to shareholders who receive cash dividends.

Accepted Answer

A) True 
 B)False

Question 15

When a corporation sells shares directly,it pays a brokerage house to issue the shares.

Accepted Answer

A) True 
 B)False

Question 16

Common shares usually carry a preference for dividends.

Accepted Answer

A) True 
 B)False

Question 17

Brian's Stereo Ltd issued preferred shares that have a $10 dividend.This means that

Accepted Answer

A) Preferred shareholders have a guaranteed dividend. 
B) The amount of the dividend is $10 per year per share. 
C) Preferred shareholders are entitled to 10% of the annual profit. 
D) The market price is $100 per share. 
E) The market price is $10 per share. 
A) Preferred shareholders have a guaranteed dividend. 
B) The amount of the dividend is $10 per year per share. 
C) Preferred shareholders are entitled to 10% of the annual profit. 
D) The market price is $100 per share. 
E) The market price is $10 per share.

Question 18

When preferred shares are issued,this will always cause an increase in the future return to common shareholders.

Accepted Answer

A) True 
 B)False

Question 19

The date a board of directors votes to pay a dividend is called the

Accepted Answer

A) Date of the annual shareholders meeting 
B) Date of declaration 
C) Date of record 
D) Date of payment 
E) Liquidating date 
A) Date of the annual shareholders meeting 
B) Date of declaration 
C) Date of record 
D) Date of payment 
E) Liquidating date

Question 20

The statement of changes in equity for a corporation shows both how retained earnings and share capital have changed during the accounting period.

Accepted Answer

A) True 
 B)False

Preferred shares that give the shareholders the option of exchanging their preferred shares for common shares at a specified rate are known as

The equity section of a corporation's balance sheet is called Corporation Equity.

The par value of a share is

If shares are issued for non-cash assets,the assets are always recorded at the current market value of the shares.

Profits or losses are recorded in a share capital account.

Legal costs incurred to get a corporation up and running should be accounted for by debiting

Preferred shares may be issued instead of common shares

The shareholders can vote to pay themselves a dividend.

The equity section for the single proprietorship can be called owner's equity because the equity belongs to the owner.The equity section for a corporation can be called shareholders' equity because the equity belongs to a group of owners known as shareholders.

Corporations issue preferred shares in order to raise capital without sacrificing control of the corporation and to increase the return earned by common shareholders.

Explain the difference between an income statement for a corporation and an income statement for a sole proprietorship,and discuss why the difference arises.

A preferred share on which the right to receive dividends is lost for any year that the dividends are not declared is a

The income of a corporation is taxed twice,first as corporate income and then as personal income to shareholders who receive cash dividends.

When a corporation sells shares directly,it pays a brokerage house to issue the shares.

Common shares usually carry a preference for dividends.

Brian's Stereo Ltd issued preferred shares that have a $10 dividend.This means that

When preferred shares are issued,this will always cause an increase in the future return to common shareholders.

The date a board of directors votes to pay a dividend is called the

The statement of changes in equity for a corporation shows both how retained earnings and share capital have changed during the accounting period.

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 4: Organization and Operation of Corporations

Preferred shares that give the shareholders the option of exchanging their preferred shares for common shares at a specified rate are known as

The equity section of a corporation's balance sheet is called Corporation Equity.

The par value of a share is

If shares are issued for non-cash assets,the assets are always recorded at the current market value of the shares.

Profits or losses are recorded in a share capital account.

Legal costs incurred to get a corporation up and running should be accounted for by debiting

Preferred shares may be issued instead of common shares

The shareholders can vote to pay themselves a dividend.

The equity section for the single proprietorship can be called owner's equity because the equity belongs to the owner.The equity section for a corporation can be called shareholders' equity because the equity belongs to a group of owners known as shareholders.

Corporations issue preferred shares in order to raise capital without sacrificing control of the corporation and to increase the return earned by common shareholders.

Explain the difference between an income statement for a corporation and an income statement for a sole proprietorship,and discuss why the difference arises.

A preferred share on which the right to receive dividends is lost for any year that the dividends are not declared is a

The income of a corporation is taxed twice,first as corporate income and then as personal income to shareholders who receive cash dividends.

When a corporation sells shares directly,it pays a brokerage house to issue the shares.

Common shares usually carry a preference for dividends.

Brian's Stereo Ltd issued preferred shares that have a $10 dividend.This means that

When preferred shares are issued,this will always cause an increase in the future return to common shareholders.

The date a board of directors votes to pay a dividend is called the

The statement of changes in equity for a corporation shows both how retained earnings and share capital have changed during the accounting period.

Property, plant and Equipment Intangibles

Current Liabilities

Partnerships

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters