Question 1

Authorized shares of a corporation

Accepted Answer

A) are the minimum amount of shares that must be issued. 
B) increase shareholders' equity. 
C) are specified in its articles of incorporation. 
D) must be recorded by a formal accounting entry. 
A) are the minimum amount of shares that must be issued. 
B) increase shareholders' equity. 
C) are specified in its articles of incorporation. 
D) must be recorded by a formal accounting entry.

Question 2

A corporate board of directors does not generally

Accepted Answer

A) select officers. 
B) formulate operating policies. 
C) declare dividends. 
D) execute policy. 
A) select officers. 
B) formulate operating policies. 
C) declare dividends. 
D) execute policy.

Question 3

Which one of the following is not an ownership right of a common shareholder?

Accepted Answer

A) to vote in the election of officers 
B) to declare dividends on the common shares 
C) to share in assets upon liquidation 
D) to share in corporate profits 
A) to vote in the election of officers 
B) to declare dividends on the common shares 
C) to share in assets upon liquidation 
D) to share in corporate profits

Question 4

Under IFRS, which of the following describes how other comprehensive income should be reported?

Accepted Answer

A) Must be reported in a statement of comprehensive income 
B) Should not be reported in the financial statements, but should only be disclosed in the footnotes 
C) Must be reported in the income statement 
D) Must be reported in the shareholders' equity section of the statement of financial position 
A) Must be reported in a statement of comprehensive income 
B) Should not be reported in the financial statements, but should only be disclosed in the footnotes 
C) Must be reported in the income statement 
D) Must be reported in the shareholders' equity section of the statement of financial position

Question 5

Identify and discuss the major characteristics of a corporation.

Accepted Answer

The major characteristics of a corporati

Question 6

When retained earnings are restricted, total retained earnings

Accepted Answer

A) are unaffected. 
B) increase. 
C) decrease. 
D) may increase or decrease. 
A) are unaffected. 
B) increase. 
C) decrease. 
D) may increase or decrease.

Question 7

Which of the following is not true of a corporation?

Accepted Answer

A) It may buy, own, and sell property. 
B) It may sue and be sued. 
C) The acts of its shareholders bind the corporation. 
D) It may enter into binding legal contracts in its own name. 
A) It may buy, own, and sell property. 
B) It may sue and be sued. 
C) The acts of its shareholders bind the corporation. 
D) It may enter into binding legal contracts in its own name.

Question 8

Earnings per share is calculated by dividing the profit available to common shareholders by the number of common shares issued at year end.

Accepted Answer

A) True 
 B)False

Question 9

One of the reasons a company may reacquire its own shares is to reduce the market value to make the shares more affordable.

Accepted Answer

A) True 
 B)False

Question 10

Stock dividends and stock splits have the following effects on retained earnings:

Accepted Answer

The answer of Stock dividends and stock splits have the...

Question 11

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 declaration of the dividend on July 15, 2015, are to

Accepted Answer

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

Question 12

When preferred shares are cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 13

Contributed capital is the amount shareholders paid or contributed to the corporation in exchange for shares of ownership.

Accepted Answer

A) True 
 B)False

Question 14

Cash dividends are declared out of

Accepted Answer

A) Dividends Payable. 
B) Preferred Shares. 
C) Common Shares. 
D) Retained Earnings. 
A) Dividends Payable. 
B) Preferred Shares. 
C) Common Shares. 
D) Retained Earnings.

Question 15

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Accepted Answer

A) Stock Dividends Distributable. 
B) Common Shares. 
C) Share Capital. 
D) Stock Dividends. 
A) Stock Dividends Distributable. 
B) Common Shares. 
C) Share Capital. 
D) Stock Dividends.

Question 16

Prepare the entries for cash dividends, stock dividends, and stock splits, and understand their financial impact.

Accepted Answer

Entries for both cash and stock dividend

Question 17

The return on common shareholders' equity is calculated by dividing profit

Accepted Answer

A) by ending common shareholders' equity. 
B) by average common shareholders' equity. 
C) less preferred dividends by ending common shareholders' equity. 
D) less preferred dividends by average common shareholders' equity. 
A) by ending common shareholders' equity. 
B) by average common shareholders' equity. 
C) less preferred dividends by ending common shareholders' equity. 
D) less preferred dividends by average common shareholders' equity.

Question 18

Return on common shareholders' equity is a ratio that

Accepted Answer

A) is calculated by dividing profit plus preferred dividends by average common shareholders' equity. 
B) shows the relationship between profit available for common shareholders and average common shareholders' equity. 
C) cannot be calculated if the company has preferred shares in addition to common shares. 
D) is calculated by dividing profit plus preferred dividends by average common shareholders' equity and shows the relationship between profit available for common shareholders and average common shareholders' equity. 
A) is calculated by dividing profit plus preferred dividends by average common shareholders' equity. 
B) shows the relationship between profit available for common shareholders and average common shareholders' equity. 
C) cannot be calculated if the company has preferred shares in addition to common shares. 
D) is calculated by dividing profit plus preferred dividends by average common shareholders' equity and shows the relationship between profit available for common shareholders and average common shareholders' equity.

Question 19

$3 cumulative preferred shares means that each preferred shareholder is eligible to receive a quarterly dividend of $3 per share.

Accepted Answer

A) True 
 B)False

Question 20

The liability for a cash dividend is recorded on the date of record, because it is on that date that the shareholders who will receive the dividend are identified.

Accepted Answer

A) True 
 B)False

Authorized shares of a corporation

A corporate board of directors does not generally

Which one of the following is not an ownership right of a common shareholder?

Under IFRS, which of the following describes how other comprehensive income should be reported?

Identify and discuss the major characteristics of a corporation.

When retained earnings are restricted, total retained earnings

Which of the following is not true of a corporation?

Earnings per share is calculated by dividing the profit available to common shareholders by the number of common shares issued at year end.

One of the reasons a company may reacquire its own shares is to reduce the market value to make the shares more affordable.

Stock dividends and stock splits have the following effects on retained earnings:

When preferred shares are cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Contributed capital is the amount shareholders paid or contributed to the corporation in exchange for shares of ownership.

Cash dividends are declared out of

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Prepare the entries for cash dividends, stock dividends, and stock splits, and understand their financial impact.

The return on common shareholders' equity is calculated by dividing profit

Return on common shareholders' equity is a ratio that

$3 cumulative preferred shares means that each preferred shareholder is eligible to receive a quarterly dividend of $3 per share.

The liability for a cash dividend is recorded on the date of record, because it is on that date that the shareholders who will receive the dividend are identified.

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

Exam 11: Reporting and Analyzing Stockholders Equity

Authorized shares of a corporation

A corporate board of directors does not generally

Which one of the following is not an ownership right of a common shareholder?

Under IFRS, which of the following describes how other comprehensive income should be reported?

Identify and discuss the major characteristics of a corporation.

When retained earnings are restricted, total retained earnings

Which of the following is not true of a corporation?

Earnings per share is calculated by dividing the profit available to common shareholders by the number of common shares issued at year end.

One of the reasons a company may reacquire its own shares is to reduce the market value to make the shares more affordable.

Stock dividends and stock splits have the following effects on retained earnings:

When preferred shares are cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Contributed capital is the amount shareholders paid or contributed to the corporation in exchange for shares of ownership.

Cash dividends are declared out of

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Prepare the entries for cash dividends, stock dividends, and stock splits, and understand their financial impact.

The return on common shareholders' equity is calculated by dividing profit

Return on common shareholders' equity is a ratio that

$3 cumulative preferred shares means that each preferred shareholder is eligible to receive a quarterly dividend of $3 per share.

The liability for a cash dividend is recorded on the date of record, because it is on that date that the shareholders who will receive the dividend are identified.

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