Question 1

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

Accepted Answer

A) True 
 B)False

Question 2

A reverse stock split increases the par or stated value per share of stock.

Accepted Answer

A) True 
 B)False

Question 3

A stock's price-earnings ratio is based on expectations that can prove to be better or worse than eventual performance.

Accepted Answer

A) True 
 B)False

Question 4

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share.The entry to record this transaction would be:

Accepted Answer

A) Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value,Common Stock $2,500; credit Common Stock $25,000. 
B) Debit Cash $27,500; credit Common Stock $27,500. 
C) Debit Common Stock $27,500; credit Cash $27,500. 
D) Debit Treasury Stock $27,500; credit Cash $27,500. 
E) Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value,Treasury Stock $25,000; credit Common Stock $27,500. 
A) Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value,Common Stock $2,500; credit Common Stock $25,000. 
B) Debit Cash $27,500; credit Common Stock $27,500. 
C) Debit Common Stock $27,500; credit Cash $27,500. 
D) Debit Treasury Stock $27,500; credit Cash $27,500. 
E) Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value,Treasury Stock $25,000; credit Common Stock $27,500.

Question 5

What is a corporation? Identify the key advantages and disadvantages of corporations.

Accepted Answer

A corporation is an entity created by la

Question 6

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

Accepted Answer

A) Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000; credit Cash $4,000. 
C) Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500; credit Cash $4,500. 
E) Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000. 
A) Debit Retained Earnings $4,000; credit Common Dividends Payable $4,000. 
B) Debit Common Dividends Payable $4,000; credit Cash $4,000. 
C) Debit Retained Earnings $4,500; credit Common Dividends Payable $4,500. 
D) Debit Common Dividends Payable $4,500; credit Cash $4,500. 
E) Debit Retained Earnings $10,000; credit Common Dividends Payable $10,000.

Question 7

Sweet Company's outstanding stock consists of 1,000 shares of noncumulative 5% preferred stock with a $100 par value and 10,000 shares of common stock with a $10 par value.During the first three years of operation,the corporation declared and paid the following total cash dividends.   The total amount of dividends paid to preferred and common shareholders over the three-year period is:

Accepted Answer

A) $15,000 preferred; $25,000 common. 
B) $11,000 preferred; $29,000 common. 
C) $5,000 preferred; $35,000 common. 
D) $12,000 preferred; $28,000 common. 
E) $10,000 preferred; $30,000 common. 
A) $15,000 preferred; $25,000 common. 
B) $11,000 preferred; $29,000 common. 
C) $5,000 preferred; $35,000 common. 
D) $12,000 preferred; $28,000 common. 
E) $10,000 preferred; $30,000 common.

Question 8

Corporations may buy back their own stock for any of the following reasons except to:

Accepted Answer

A) Avoid a hostile take-over. 
B) Have shares available for a merger or acquisition. 
C) Have shares available for employee compensation. 
D) Maintain market value for the company stock. 
E) Allow management to assume the voting rights. 
A) Avoid a hostile take-over. 
B) Have shares available for a merger or acquisition. 
C) Have shares available for employee compensation. 
D) Maintain market value for the company stock. 
E) Allow management to assume the voting rights.

Question 9

________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

Accepted Answer

The answer of ________ is the annual amount of cash...

Question 10

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Accepted Answer

A) True 
 B)False

Question 11

A registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.

Accepted Answer

A) True 
 B)False

Question 12

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

Accepted Answer

A) True 
 B)False

Question 13

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IFRS is true except:

Accepted Answer

A) U.S.GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock. 
B) Only gains are recognized on retirements of treasury stock under IFRS. 
C) IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock. 
D) Gains are not recognized on retirements of treasury stock under U.S.GAAP. 
E) A company's assets and equity are always reduced by the amount paid for the retiring stock. 
A) U.S.GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock. 
B) Only gains are recognized on retirements of treasury stock under IFRS. 
C) IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock. 
D) Gains are not recognized on retirements of treasury stock under U.S.GAAP. 
E) A company's assets and equity are always reduced by the amount paid for the retiring stock.

Question 14

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Accepted Answer

A) True 
 B)False

Question 15

Djarleen Company has 10,000 shares of $10 par preferred stock,which were issued at par.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 16

A company was organized in January 2016 and has 20,000 shares of $10 par value,10%,nonparticipating preferred stock outstanding and 150,000 shares of $2 par value common stock outstanding.It has declared and paid cash dividends each year as shown below.Calculate the total dividends distributed to each class of stockholder under each of the assumptions given.

Accepted Answer

@#IMG-DLM& Preferred dividend:

Question 17

The declaration of cash dividends increases retained earnings.

Accepted Answer

A) True 
 B)False

Question 18

A company had the following stockholders' equity on January 1:
   On January 10,the company declared a 40% stock dividend to stockholders of record on January 25,to be distributed January 31.The market value of the stock on January 10 prior to the dividend was $20 per share.What is the book value per common share on February 1?

Accepted Answer

Total stockholders' equity does not chan

Question 19

A debit balance in retained earnings is referred to as a retained earnings deficit.

Accepted Answer

A) True 
 B)False

Question 20

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

Accepted Answer

A) True 
 B)False

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

A reverse stock split increases the par or stated value per share of stock.

A stock's price-earnings ratio is based on expectations that can prove to be better or worse than eventual performance.

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share.The entry to record this transaction would be:

What is a corporation? Identify the key advantages and disadvantages of corporations.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

Corporations may buy back their own stock for any of the following reasons except to:

________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

A registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IFRS is true except:

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Djarleen Company has 10,000 shares of $10 par preferred stock,which were issued at par.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:

The declaration of cash dividends increases retained earnings.

A debit balance in retained earnings is referred to as a retained earnings deficit.

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 11: Reporting and Analyzing Equity

A large stock dividend only occurs when a distribution of more than 50% of previously outstanding shares is issued.

A reverse stock split increases the par or stated value per share of stock.

A stock's price-earnings ratio is based on expectations that can prove to be better or worse than eventual performance.

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share.The entry to record this transaction would be:

What is a corporation? Identify the key advantages and disadvantages of corporations.

Hutter Corporation declared a $0.50 per share cash dividend on its common shares.The company has 20,000 shares authorized,9,000 shares issued,and 8,000 shares of common stock outstanding.The journal entry to record the dividend payment is:

Corporations may buy back their own stock for any of the following reasons except to:

________ is the annual amount of cash dividends per share distributed to common shareholders relative to the stock's market price.

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

A registrar keeps stockholder records and prepares official lists of stockholders and dividend payments.

Special rights often granted to preferred stock include a preference for receiving dividends and additional voting privileges.

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IFRS is true except:

If a company has noncumulative preferred stock,basic earnings per share is equal to net income less preferred dividends declared divided by the number of weighted average common shares outstanding.

Djarleen Company has 10,000 shares of $10 par preferred stock,which were issued at par.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:

The declaration of cash dividends increases retained earnings.

A debit balance in retained earnings is referred to as a retained earnings deficit.

Dividing stockholders' equity applicable to common shares by the number of common shares outstanding yields the book value per common share.

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters