Question 1

A stock split will

Accepted Answer

A) have no effect on retained earnings. 
B) increase total share capital. 
C) increase total assets. 
D) decrease the number of shares issued. 
A) have no effect on retained earnings. 
B) increase total share capital. 
C) increase total assets. 
D) decrease the number of shares issued.

Question 2

Those most responsible for the major policy decisions of a corporation are the

Accepted Answer

A) shareholders. 
B) board of directors. 
C) management. 
D) employees. 
A) shareholders. 
B) board of directors. 
C) management. 
D) employees.

Question 3

Use the following information for questions 
On January 1, Brunhilde Corporation had 240,000 common shares issued.On March 17, the company declared a 5% stock dividend to be distributed on March 30.The market value of the shares was $9 on March 17 and $12 on March 30.
-The entry to record the transaction of March 17 would include a

Accepted Answer

A) credit to Retained Earnings for $12,000. 
B) credit to Cash for $108,000. 
C) credit to Stock Dividends Distributable for $108,000. 
D) debit to Stock Dividends Distributable for $144,000. 
A) credit to Retained Earnings for $12,000. 
B) credit to Cash for $108,000. 
C) credit to Stock Dividends Distributable for $108,000. 
D) debit to Stock Dividends Distributable for $144,000.

Question 4

Which of the following statements regarding the date of a cash dividend declaration is not true?

Accepted Answer

A) The dividend can be cancelled once it has been declared. 
B) The corporation is committed to a legal, binding obligation. 
C) The board of directors formally authorizes the cash dividend. 
D) A liability account must be created or increased. 
A) The dividend can be cancelled once it has been declared. 
B) The corporation is committed to a legal, binding obligation. 
C) The board of directors formally authorizes the cash dividend. 
D) A liability account must be created or increased.

Question 5

Which of the following is not a right or preference associated with preferred shares?

Accepted Answer

A) the right to vote 
B) first claim to dividends 
C) preference to corporate assets in case of liquidation 
D) to receive dividends in arrears before common shareholders receive dividends 
A) the right to vote 
B) first claim to dividends 
C) preference to corporate assets in case of liquidation 
D) to receive dividends in arrears before common shareholders receive dividends

Question 6

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

Accepted Answer

The answer of Indicate the respective effects of the declaration...

Question 7

JKL Inc.has 10,000, $2, noncumulative preferred shares and 150,000 common shares issued.What is the total annual dividend on the preferred shares?

Accepted Answer

A) $10,000 
B) $20,000 
C) $150,000 
D) $300,000 
A) $10,000 
B) $20,000 
C) $150,000 
D) $300,000

Question 8

The trading of a corporation's shares on the secondary market has no impact on the corporation's financial position.

Accepted Answer

A) True 
 B)False

Question 9

Use the following information for questions 
On July 15, 2015, the board of directors of George Easton Limited declared a cash dividend of $0.50 per share on 84,000 common shares.The dividend is to be paid on August 15, 2015, to shareholders of record on July 31, 2015.
-The effects of the journal entry to record the payment of the dividend on August 15, 2015, are to

Accepted Answer

A) decrease shareholders' equity and decrease liabilities. 
B) decrease liabilities and decrease assets. 
C) increase shareholders' equity and increase liabilities. 
D) increase shareholders' equity and decrease assets. 
A) decrease shareholders' equity and decrease liabilities. 
B) decrease liabilities and decrease assets. 
C) increase shareholders' equity and increase liabilities. 
D) increase shareholders' equity and decrease assets.

Question 10

Which of the following statements about dividends is not correct?

Accepted Answer

A) Cash dividends are generally declared quarterly as a dollar amount per share. 
B) Dividends can be declared on both preferred and common shares. 
C) The board of directors is obligated to declare dividends. 
D) Dividends can be in cash or stock. 
A) Cash dividends are generally declared quarterly as a dollar amount per share. 
B) Dividends can be declared on both preferred and common shares. 
C) The board of directors is obligated to declare dividends. 
D) Dividends can be in cash or stock.

Question 11

Return on common shareholders' equity is calculated by dividing profit by ending shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 12

The payout ratio is calculated by dividing the cash dividends paid on common shares by retained earnings.

Accepted Answer

A) True 
 B)False

Question 13

A debit balance in retained earnings is called a

Accepted Answer

A) loss. 
B) capital surplus. 
C) deficit. 
D) contributed capital. 
A) loss. 
B) capital surplus. 
C) deficit. 
D) contributed capital.

Question 14

The net effect on the corporation's books of the declaration and payment of a cash dividend are to

Accepted Answer

A) decrease liabilities and decrease shareholders' equity. 
B) increase shareholders' equity and decrease liabilities. 
C) decrease assets and decrease shareholders' equity. 
D) increase assets and increase shareholders' equity. 
A) decrease liabilities and decrease shareholders' equity. 
B) increase shareholders' equity and decrease liabilities. 
C) decrease assets and decrease shareholders' equity. 
D) increase assets and increase shareholders' equity.

Question 15

Retained earnings that are restricted are unavailable for dividends.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following factors does not affect the initial market price of a share?

Accepted Answer

A) the company's anticipated future profit 
B) the legal value of the share 
C) the current state of the economy 
D) the expected dividend rate per share 
A) the company's anticipated future profit 
B) the legal value of the share 
C) the current state of the economy 
D) the expected dividend rate per share

Question 17

Which one of the following events would not require a journal entry on a corporation's books?

Accepted Answer

A) 2 for 1 stock split 
B) 100% stock dividend 
C) 2% stock dividend 
D) $1 per share cash dividend 
A) 2 for 1 stock split 
B) 100% stock dividend 
C) 2% stock dividend 
D) $1 per share cash dividend

Question 18

The number of common shares authorized can never be greater than the number of shares issued.

Accepted Answer

A) True 
 B)False

Question 19

A stock dividend results in a decrease in

Accepted Answer

A) current liabilities. 
B) profit. 
C) share capital. 
D) retained earnings. 
A) current liabilities. 
B) profit. 
C) share capital. 
D) retained earnings.

Question 20

Retained earnings represents the amount of cash available for dividends.

Accepted Answer

A) True 
 B)False

A stock split will

Those most responsible for the major policy decisions of a corporation are the

Which of the following statements regarding the date of a cash dividend declaration is not true?

Which of the following is not a right or preference associated with preferred shares?

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

JKL Inc.has 10,000, $2, noncumulative preferred shares and 150,000 common shares issued.What is the total annual dividend on the preferred shares?

The trading of a corporation's shares on the secondary market has no impact on the corporation's financial position.

Which of the following statements about dividends is not correct?

Return on common shareholders' equity is calculated by dividing profit by ending shareholders' equity.

The payout ratio is calculated by dividing the cash dividends paid on common shares by retained earnings.

A debit balance in retained earnings is called a

The net effect on the corporation's books of the declaration and payment of a cash dividend are to

Retained earnings that are restricted are unavailable for dividends.

Which of the following factors does not affect the initial market price of a share?

Which one of the following events would not require a journal entry on a corporation's books?

The number of common shares authorized can never be greater than the number of shares issued.

A stock dividend results in a decrease in

Retained earnings represents the amount of cash available for dividends.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Long-Lived Assets

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

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Exam 11: Reporting and Analyzing Stockholders Equity

A stock split will

Those most responsible for the major policy decisions of a corporation are the

Which of the following statements regarding the date of a cash dividend declaration is not true?

Which of the following is not a right or preference associated with preferred shares?

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

JKL Inc.has 10,000, $2, noncumulative preferred shares and 150,000 common shares issued.What is the total annual dividend on the preferred shares?

The trading of a corporation's shares on the secondary market has no impact on the corporation's financial position.

Which of the following statements about dividends is not correct?

Return on common shareholders' equity is calculated by dividing profit by ending shareholders' equity.

The payout ratio is calculated by dividing the cash dividends paid on common shares by retained earnings.

A debit balance in retained earnings is called a

The net effect on the corporation's books of the declaration and payment of a cash dividend are to

Retained earnings that are restricted are unavailable for dividends.

Which of the following factors does not affect the initial market price of a share?

Which one of the following events would not require a journal entry on a corporation's books?

The number of common shares authorized can never be greater than the number of shares issued.

A stock dividend results in a decrease in

Retained earnings represents the amount of cash available for dividends.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Long-Lived Assets

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters