Question 1

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

Accepted Answer

A) True 
 B)False

Question 2

The authorized stock of a corporation

Accepted Answer

A)  must be recorded in a formal accounting entry 
B)  only reflects the initial capital needs of the company 
C)  is indicated in its by-laws 
D)  is indicated in its charter 
A)  must be recorded in a formal accounting entry 
B)  only reflects the initial capital needs of the company 
C)  is indicated in its by-laws 
D)  is indicated in its charter

Question 3

The par value per share of common stock represents the

Accepted Answer

A)  minimum selling price of the stock established by the articles of incorporation 
B)  minimum amount the stockholder will receive when the corporation is liquidated 
C)  dollar amount assigned to each share 
D)  amount of dividends per share to be received each year 
A)  minimum selling price of the stock established by the articles of incorporation 
B)  minimum amount the stockholder will receive when the corporation is liquidated 
C)  dollar amount assigned to each share 
D)  amount of dividends per share to be received each year

Question 4

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Accepted Answer

A) True 
 B)False

Question 5

When a stock dividend is declared, which of the following accounts is credited?

Accepted Answer

A)  Common Sock 
B)  Dividend Payable 
C)  Stock Dividends Distributable 
D)  Retained Earnings 
A)  Common Sock 
B)  Dividend Payable 
C)  Stock Dividends Distributable 
D)  Retained Earnings

Question 6

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 7

Big Bluestem Inc. reported the following results for the year ending April 30:   Prepare a retained earnings statement for the fiscal year ended April 30.

Accepted Answer

The answer of Big Bluestem Inc. reported the following results...

Question 8

Firefly, Inc. reported the following results for the year ending July 31:   Prepare a retained earnings statement for the fiscal year ended July 31.

Accepted Answer

The answer of Firefly, Inc. reported the following results for...

Question 9

Match the following stockholders' equity concepts to the appropriate term a-h).
-Cash distribution of a company's earnings to stockholders

Accepted Answer

A) cash dividend 
B) date of record 
C) Stock Dividends Distributable 
D) date of declaration 
E) treasury stock
F)preferred stock
G)date of payment
H)Paid-In Capital in Excess of Par 
A) cash dividend 
B) date of record 
C) Stock Dividends Distributable 
D) date of declaration 
E) treasury stock
F)preferred stock
G)date of payment
H)Paid-In Capital in Excess of Par

Question 10

For accounting purposes, stated value is treated the same way as par value.

Accepted Answer

A) True 
 B)False

Question 11

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 12

Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends:
Year 1:
$ 50,000
Year 2:
90,000
Year 3:
130,000
Determine the dividends per share for preferred and common stock for each year.

Accepted Answer

The answer of Sabas Company has 40,000 shares of $100...

Question 13

While some businesses have been granted charters under state laws, most businesses receive their charters under federal laws.

Accepted Answer

A) True 
 B)False

Question 14

The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

Accepted Answer

A) True 
 B)False

Question 15

When the board of directors declares a cash or stock dividend, this action decreases retained earnings.

Accepted Answer

A) True 
 B)False

Question 16

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

Accepted Answer

Apr. 10 Land 73,000

Question 17

Stockholders' equity

Accepted Answer

A)  is usually equal to cash on hand 
B)  includes paid-in capital and liabilities 
C)  includes retained earnings and paid-in capital 
D)  is shown on the income statement 
A)  is usually equal to cash on hand 
B)  includes paid-in capital and liabilities 
C)  includes retained earnings and paid-in capital 
D)  is shown on the income statement

Question 18

On January 1, Year 1, a company had the following transactions:
- Issued 10,000 shares of $2.00 par common stock for $12.00 per share.
- Issued 3,000 shares of $50 par, 6% cumulative preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.
The company had the following dividend information available:
Year 1 - No dividend paid
Year 2 - Paid a $2,000 total dividend Year 3 - Paid a $20,000 total dividend Year 4 - Paid a $25,000 total dividend
Using the following format, fill in the correct values for each year:

Accepted Answer

The answer of On January 1, Year 1, a company...

Question 19

On April 10, Maranda Corporation issued for cash 11,000 shares of no-par common stock at $25. On May 5, Maranda issued at par 1,000 shares of 4%, $50 par preferred stock for cash. On May 25, Maranda issued for cash 15,000 shares of 4%, $50 par preferred stock at $55.
Journalize the entries to record the April 10, May 5, and May 25 transactions.

Accepted Answer

The answer of On April 10, Maranda Corporation issued for...

Question 20

Match each of the following stockholders' equity concepts to the appropriate term a-h).
-The rules and procedures for conducting a corporation's affairs

Accepted Answer

A) articles of incorporation 
B) limited liability 
C) bylaws 
D) corporation 
E) public corporation
F)board of directors
G)private corporation
H)dividends 
A) articles of incorporation 
B) limited liability 
C) bylaws 
D) corporation 
E) public corporation
F)board of directors
G)private corporation
H)dividends

Exam 11: Corporations: Organization, Stock Transactions, and Dividends

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

The authorized stock of a corporation

The par value per share of common stock represents the

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

When a stock dividend is declared, which of the following accounts is credited?

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

Big Bluestem Inc. reported the following results for the year ending April 30: Prepare a retained earnings statement for the fiscal year ended April 30.

Firefly, Inc. reported the following results for the year ending July 31: Prepare a retained earnings statement for the fiscal year ended July 31.

Match the following stockholders' equity concepts to the appropriate term a-h). -Cash distribution of a company's earnings to stockholders

For accounting purposes, stated value is treated the same way as par value.

The amount of a corporation's retained earnings that has been restricted/appropriated should be reported in the notes to the financial statements.

Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: Year 1: $ 50,000 Year 2: 90,000 Year 3: 130,000 Determine the dividends per share for preferred and common stock for each year.

While some businesses have been granted charters under state laws, most businesses receive their charters under federal laws.

The primary purpose of a stock split is to reduce the number of shares outstanding in order to encourage more investors to enter the market for the company's shares.

When the board of directors declares a cash or stock dividend, this action decreases retained earnings.

On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.

Stockholders' equity

Match each of the following stockholders' equity concepts to the appropriate term a-h). -The rules and procedures for conducting a corporation's affairs

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters