Question 1

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Accepted Answer

A) True 
 B)False

Question 2

Global Corporation had 50,000 shares of $20 par value common stock outstanding on July 1.Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27.The entry to record the dividend declaration is:

Accepted Answer

A) Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $135,000. 
B) Debit Retained Earnings $135,000; credit Cash $135,000. 
C) Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $100,000; credit Paid-In Capital in Excess of Par Value,Common Stock $35,000. 
D) Debit Retained Earnings $100,000; credit Common Stock Dividend Distributable $100,000. 
E) No entry is made until the stock is issued. 
A) Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $135,000. 
B) Debit Retained Earnings $135,000; credit Cash $135,000. 
C) Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $100,000; credit Paid-In Capital in Excess of Par Value,Common Stock $35,000. 
D) Debit Retained Earnings $100,000; credit Common Stock Dividend Distributable $100,000. 
E) No entry is made until the stock is issued.

Question 3

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 4

Record the following transactions of Naches Corporation in general journal form:
(a)Reacquired 8,000 of its own $3 par value common stock at $20 cash per share.The stock was originally issued at $15 per share.
(b)Sold 2,000 shares of the stock reacquired under part (a)at $23 cash per share.
(c)Sold 3,000 shares of the stock reacquired under part (a)at $19 cash per share.

Accepted Answer

The answer of Record the following transactions of Naches Corporation...

Question 5

Sweet Company's outstanding stock consists of 1,000 shares of cumulative 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 amount of dividends paid to preferred and common shareholders in year 3 is:

Accepted Answer

A) $7,000 preferred; $25,000 common. 
B) $5,000 preferred; $27,000 common. 
C) $15,000 preferred; $17,000 common. 
D) $32,000 preferred; $0 common. 
E) $0 preferred; $32,000 common. 
A) $7,000 preferred; $25,000 common. 
B) $5,000 preferred; $27,000 common. 
C) $15,000 preferred; $17,000 common. 
D) $32,000 preferred; $0 common. 
E) $0 preferred; $32,000 common.

Question 6

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

Accepted Answer

A) Common stock's market value. 
B) Earnings per share. 
C) Investors' purchase price of the stock. 
D) Amount of retained earnings. 
E) Amount of cash. 
A) Common stock's market value. 
B) Earnings per share. 
C) Investors' purchase price of the stock. 
D) Amount of retained earnings. 
E) Amount of cash.

Question 7

The price at which a share of stock is bought or sold is known as par value.

Accepted Answer

A) True 
 B)False

Question 8

The following data has been collected about Keller Company's stockholders' equity accounts:   Assuming the treasury shares were all purchased at the same price,the number of shares of treasury stock is:

Accepted Answer

A) 1,150. 
B) 1,000. 
C) 575. 
D) 11,000. 
E) 21,000. 
A) 1,150. 
B) 1,000. 
C) 575. 
D) 11,000. 
E) 21,000.

Question 9

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:

Accepted Answer

A) Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value,Common Stock $45,000; credit Common Stock $5,000. 
B) Debit Cash $50,000; credit Common Stock $50,000. 
C) Debit Common Stock $50,000; credit Cash $50,000. 
D) Debit Treasury Stock $50,000; credit Cash $50,000. 
E) Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value,Common Stock $5,000; credit Common Stock $45,000. 
A) Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value,Common Stock $45,000; credit Common Stock $5,000. 
B) Debit Cash $50,000; credit Common Stock $50,000. 
C) Debit Common Stock $50,000; credit Cash $50,000. 
D) Debit Treasury Stock $50,000; credit Cash $50,000. 
E) Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value,Common Stock $5,000; credit Common Stock $45,000.

Question 10

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

separate l

Question 12

Explain the difference between a large stock dividend and a small stock dividend.In addition,explain how to record these two types of stock dividends.

Accepted Answer

A large stock dividend is a distribution

Question 13

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

Accepted Answer

A) Issued. 
B) Authorized. 
C) Subscribed. 
D) Outstanding. 
E) In treasury. 
A) Issued. 
B) Authorized. 
C) Subscribed. 
D) Outstanding. 
E) In treasury.

Question 14

Large stock dividends are recorded at par or stated value.

Accepted Answer

A) True 
 B)False

Question 15

Changes in accounting estimates are:

Accepted Answer

A) Considered accounting errors. 
B) Reported as prior period adjustments. 
C) Accounted for with a cumulative "catch-up" adjustment. 
D) Extraordinary items. 
E) Accounted for in current and future periods. 
A) Considered accounting errors. 
B) Reported as prior period adjustments. 
C) Accounted for with a cumulative "catch-up" adjustment. 
D) Extraordinary items. 
E) Accounted for in current and future periods.

Question 16

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Accepted Answer

A) True 
 B)False

Question 17

Declaration of a cash dividend results in a liability being recorded.

Accepted Answer

A) True 
 B)False

Question 18

On August 1,a company's board of directors declared a 10% stock dividend to be distributed on September 1 to the stockholders of record on August 20.The company had 1,000,000 shares of $2.50 par value common stock outstanding with a market value of $23 per share.Prepare the journal entries required on August 1,August 20,and September 1.

Accepted Answer

The answer of On August 1,a company's board of directors...

Question 19

Small stock dividends are recorded at par or stated value.

Accepted Answer

A) True 
 B)False

Question 20

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

A preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Global Corporation had 50,000 shares of $20 par value common stock outstanding on July 1.Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27.The entry to record the dividend declaration is:

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

The price at which a share of stock is bought or sold is known as par value.

The following data has been collected about Keller Company's stockholders' equity accounts: Assuming the treasury shares were all purchased at the same price,the number of shares of treasury stock is:

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

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

Explain the difference between a large stock dividend and a small stock dividend.In addition,explain how to record these two types of stock dividends.

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

Large stock dividends are recorded at par or stated value.

Changes in accounting estimates are:

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Declaration of a cash dividend results in a liability being recorded.

Small stock dividends are recorded at par or stated value.

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

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 preemptive right means shareholders can purchase their proportional share of common stock issued later by the corporation.

Global Corporation had 50,000 shares of $20 par value common stock outstanding on July 1.Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27.The entry to record the dividend declaration is:

The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

The price at which a share of stock is bought or sold is known as par value.

The following data has been collected about Keller Company's stockholders' equity accounts: Assuming the treasury shares were all purchased at the same price,the number of shares of treasury stock is:

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share.The issue price was $10 per share.The entry to record this transaction would be:

If a corporation receives assets other than cash in exchange for stock,it records the assets received at their market value as of the date of the transaction.

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

Explain the difference between a large stock dividend and a small stock dividend.In addition,explain how to record these two types of stock dividends.

A corporation's minimum legal capital is established by recording the par or stated value of the number of shares:

Large stock dividends are recorded at par or stated value.

Changes in accounting estimates are:

Stated value stock is no-par stock that is assigned a "stated" value per share by the corporation's board of directors.

Declaration of a cash dividend results in a liability being recorded.

Small stock dividends are recorded at par or stated value.

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

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