Question 1

Irwin Inc. had 300,000 common shares before a stock split occurred and 600,000 shares after the stock split. The stock split was

Accepted Answer

A) 1 for 2. 
B) 4 for 1. 
C) 1 for 4. 
D) 2 for 1. 
A) 1 for 2. 
B) 4 for 1. 
C) 1 for 4. 
D) 2 for 1.

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Dividends in arrears are dividends on

Accepted Answer

A) cumulative preferred shares that have been declared but have not been paid. 
B) non-cumulative preferred shares that have not been declared for a given period of time. 
C) cumulative preferred shares that have not been declared for a given period of time. 
D) common dividends that have been declared but have not been paid. 
A) cumulative preferred shares that have been declared but have not been paid. 
B) non-cumulative preferred shares that have not been declared for a given period of time. 
C) cumulative preferred shares that have not been declared for a given period of time. 
D) common dividends that have been declared but have not been paid.

Question 4

Ford Harrison has invested $650,000 in a corporation. The corporation does not do well and must declare bankruptcy. What amount does Harrison stand to lose?

Accepted Answer

A) Up to his total investment of $650,000 
B) Zero 
C) The $650,000 plus any personal assets the creditors demand 
D) $325,000 
A) Up to his total investment of $650,000 
B) Zero 
C) The $650,000 plus any personal assets the creditors demand 
D) $325,000

Question 5

Coombs Corp. declared a two-for-one stock split. Solly Fogarty owned 500 shares of Coombs that were trading for $20 each before the split. Which of the following is likely to be true after the split?

Accepted Answer

A) The number of shares Solly owns will increase by 50%. 
B) The market price per share will drop by 50%. 
C) The total market value of Solly's shares will double. 
D) The market price per share will increase by 100%. 
A) The number of shares Solly owns will increase by 50%. 
B) The market price per share will drop by 50%. 
C) The total market value of Solly's shares will double. 
D) The market price per share will increase by 100%.

Question 6

A corporation is not an entity that is separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 7

A company can control the market value of its shares.

Accepted Answer

A) True 
 B)False

Question 8

For a corporation reporting under IFRS, when shares are issued for a non-cash consideration and a ready market for the shares exists, they are recorded at

Accepted Answer

A) zero. 
B) the fair value of the shares. 
C) the fair value of the assets acquired. 
D) the average of the fair value of the shares and the fair value of the assets acquired. 
A) zero. 
B) the fair value of the shares. 
C) the fair value of the assets acquired. 
D) the average of the fair value of the shares and the fair value of the assets acquired.

Question 9

Identify the effect the declaration of a cash dividend and a stock dividend has on the total shareholders' equity of a corporation:

Accepted Answer

The answer of Identify the effect the declaration of a...

Question 10

Placing a restriction on retained earnings will

Accepted Answer

A) ensure that the corporation has sufficient cash for a specific purpose. 
B) increase total shareholders' equity. 
C) inform readers that a portion of retained earnings is unavailable for dividends. 
D) decrease shareholders' equity. 
A) ensure that the corporation has sufficient cash for a specific purpose. 
B) increase total shareholders' equity. 
C) inform readers that a portion of retained earnings is unavailable for dividends. 
D) decrease shareholders' equity.

Question 11

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 12

The declaration of a stock dividend will

Accepted Answer

A) increase share capital. 
B) change total shareholders' equity. 
C) increase total liabilities. 
D) increase total assets. 
A) increase share capital. 
B) change total shareholders' equity. 
C) increase total liabilities. 
D) increase total assets.

Question 13

A corporation acts under its' own name rather than in the name of its shareholders.

Accepted Answer

A) True 
 B)False

Question 14

Retractable preferred shares are

Accepted Answer

A) included in contributed capital on the statement of financial position. 
B) callable at the corporation's option. 
C) never issued. 
D) presented under liabilities on the statement of financial position. 
A) included in contributed capital on the statement of financial position. 
B) callable at the corporation's option. 
C) never issued. 
D) presented under liabilities on the statement of financial position.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The board of directors of Wessex Inc. declared a cash dividend on November 15, 2012, to be paid on December 15, 2012, to shareholders owning shares on November 30, 2012. Given these facts, the date of November 30, 2012, is referred to as the

Accepted Answer

A) declaration date. 
B) record date. 
C) payment date. 
D) authorization date. 
A) declaration date. 
B) record date. 
C) payment date. 
D) authorization date.

Question 17

The date on which a cash dividend becomes a binding legal obligation is on the

Accepted Answer

A) declaration date. 
B) date of record. 
C) payment date. 
D) last day of the fiscal year. 
A) declaration date. 
B) date of record. 
C) payment date. 
D) last day of the fiscal year.

Question 18

Legal capital cannot be distributed to the shareholders, but must remain invested in the corporation for the protection of its creditors.

Accepted Answer

A) True 
 B)False

Question 19

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 20

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

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

Irwin Inc. had 300,000 common shares before a stock split occurred and 600,000 shares after the stock split. The stock split was

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

Dividends in arrears are dividends on

Ford Harrison has invested $650,000 in a corporation. The corporation does not do well and must declare bankruptcy. What amount does Harrison stand to lose?

Coombs Corp. declared a two-for-one stock split. Solly Fogarty owned 500 shares of Coombs that were trading for $20 each before the split. Which of the following is likely to be true after the split?

A corporation is not an entity that is separate and distinct from its owners.

A company can control the market value of its shares.

For a corporation reporting under IFRS, when shares are issued for a non-cash consideration and a ready market for the shares exists, they are recorded at

Identify the effect the declaration of a cash dividend and a stock dividend has on the total shareholders' equity of a corporation:

Placing a restriction on retained earnings will

Which of the following statements about dividends is not correct?

The declaration of a stock dividend will

A corporation acts under its' own name rather than in the name of its shareholders.

Retractable preferred shares are

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

The board of directors of Wessex Inc. declared a cash dividend on November 15, 2012, to be paid on December 15, 2012, to shareholders owning shares on November 30, 2012. Given these facts, the date of November 30, 2012, is referred to as the

The date on which a cash dividend becomes a binding legal obligation is on the

Legal capital cannot be distributed to the shareholders, but must remain invested in the corporation for the protection of its creditors.

Which of the following is not true of a corporation?

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 11: Reporting and Analyzing Shareholders Equity

Irwin Inc. had 300,000 common shares before a stock split occurred and 600,000 shares after the stock split. The stock split was

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

Dividends in arrears are dividends on

Ford Harrison has invested $650,000 in a corporation. The corporation does not do well and must declare bankruptcy. What amount does Harrison stand to lose?

Coombs Corp. declared a two-for-one stock split. Solly Fogarty owned 500 shares of Coombs that were trading for $20 each before the split. Which of the following is likely to be true after the split?

A corporation is not an entity that is separate and distinct from its owners.

A company can control the market value of its shares.

For a corporation reporting under IFRS, when shares are issued for a non-cash consideration and a ready market for the shares exists, they are recorded at

Identify the effect the declaration of a cash dividend and a stock dividend has on the total shareholders' equity of a corporation:

Placing a restriction on retained earnings will

Which of the following statements about dividends is not correct?

The declaration of a stock dividend will

A corporation acts under its' own name rather than in the name of its shareholders.

Retractable preferred shares are

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

The board of directors of Wessex Inc. declared a cash dividend on November 15, 2012, to be paid on December 15, 2012, to shareholders owning shares on November 30, 2012. Given these facts, the date of November 30, 2012, is referred to as the

The date on which a cash dividend becomes a binding legal obligation is on the

Legal capital cannot be distributed to the shareholders, but must remain invested in the corporation for the protection of its creditors.

Which of the following is not true of a corporation?

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters