Question 1

Diluted earnings per share

Accepted Answer

A) is sometimes higher than basic earnings per share. 
B) takes into account all securities issued that can be converted into common shares. 
C) shows how many dollars were earned for each dollar invested by common shareholders. 
D) is not required to be disclosed for corporations reporting under IFRS. 
A) is sometimes higher than basic earnings per share. 
B) takes into account all securities issued that can be converted into common shares. 
C) shows how many dollars were earned for each dollar invested by common shareholders. 
D) is not required to be disclosed for corporations reporting under IFRS.

Question 2

Cambridge Corp declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed?

Accepted Answer

A) The total market value of Will's shares was $6,300 before the stock dividend but will probably decrease after the stock dividend. 
B) The total market value of Will's shares was $6,300 before the stock dividend and $6,615 after the stock dividend. 
C) Will owned 300 shares before the stock dividend and 315 shares after the stock dividend. 
D) Fewer investors will be able to buy Cambridge shares. 
A) The total market value of Will's shares was $6,300 before the stock dividend but will probably decrease after the stock dividend. 
B) The total market value of Will's shares was $6,300 before the stock dividend and $6,615 after the stock dividend. 
C) Will owned 300 shares before the stock dividend and 315 shares after the stock dividend. 
D) Fewer investors will be able to buy Cambridge shares.

Question 3

Use the following information for questions 
On July 15, 2012, 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, 2012, to shareholders of record on July 31, 2012.
-The effects of the journal entry to record the declaration of the dividend on July 15, 2012, 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 4

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 5

At January 1, 2012, Jay Corporation had a credit balance of $5,450,000 in its retained earnings account. During the year, Jay paid $250,000 in dividends, reported profit of $560,000 and other comprehensive income of $750,000. The December 31 balance of retained earnings is:

Accepted Answer

A) $5,760,000. 
B) $5,950,000. 
C) $6,200,000. 
D) $6,450,000. 
A) $5,760,000. 
B) $5,950,000. 
C) $6,200,000. 
D) $6,450,000.

Question 6

Two classifications appearing in the share capital section of the statement of financial position are

Accepted Answer

A) dividends payable and dividends distributable. 
B) share capital and retained earnings. 
C) preferred shares and common shares. 
D) contributed capital and retained earnings. 
A) dividends payable and dividends distributable. 
B) share capital and retained earnings. 
C) preferred shares and common shares. 
D) contributed capital and retained earnings.

Question 7

Stock Dividends Distributable is reported as a liability on the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 8

Use the following information for questions 
Air Ace Corporation issues 5,000 preferred shares for $40 per share.
-In the statement of financial position, the effects of the above transaction will be reported under

Accepted Answer

A) liabilities. 
B) retained earnings. 
C) share capital. 
D) accumulated other comprehensive income. 
A) liabilities. 
B) retained earnings. 
C) share capital. 
D) accumulated other comprehensive income.

Question 9

Most companies in Canada have an unlimited amount of authorized shares.

Accepted Answer

A) True 
 B)False

Question 10

The effect of the declaration of a cash dividend is to

Accepted Answer

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

Question 11

Retained earnings are occasionally restricted

Accepted Answer

A) to set aside cash for dividends. 
B) to keep the legal capital associated with share capital intact. 
C) due to contractual loan restrictions. 
D) if preferred dividends are in arrears. 
A) to set aside cash for dividends. 
B) to keep the legal capital associated with share capital intact. 
C) due to contractual loan restrictions. 
D) if preferred dividends are in arrears.

Question 12

The statement of changes in equity discloses changes in total shareholders' equity for the period as well as changes in each shareholders' equity account.

Accepted Answer

A) True 
 B)False

Question 13

A disadvantage of the corporate form of organization is

Accepted Answer

A) its status as a separate legal entity. 
B) continuous existence. 
C) government regulation. 
D) ease of transfer of ownership. 
A) its status as a separate legal entity. 
B) continuous existence. 
C) government regulation. 
D) ease of transfer of ownership.

Question 14

A stock split results in a transfer at market value from retained earnings to share capital.

Accepted Answer

A) True 
 B)False

Question 15

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 30 would include a

Accepted Answer

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

Question 16

A corporation can be organized for the purpose of making a profit or it may be not-for-profit.

Accepted Answer

A) True 
 B)False

Question 17

If common shares are reacquired at a price less than their average cost and retired, the difference is credited to contributed capital.

Accepted Answer

A) True 
 B)False

Question 18

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 19

The term residual claim refers to a shareholder's right to

Accepted Answer

A) receive dividends. 
B) share in assets upon liquidation. 
C) acquire additional shares when offered. 
D) vote. 
A) receive dividends. 
B) share in assets upon liquidation. 
C) acquire additional shares when offered. 
D) vote.

Question 20

Companies reporting under ASPE must disclose earnings per share, but companies reporting under IFRS do not.

Accepted Answer

A) True 
 B)False

Diluted earnings per share

Cambridge Corp declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed?

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

At January 1, 2012, Jay Corporation had a credit balance of $5,450,000 in its retained earnings account. During the year, Jay paid $250,000 in dividends, reported profit of $560,000 and other comprehensive income of $750,000. The December 31 balance of retained earnings is:

Two classifications appearing in the share capital section of the statement of financial position are

Stock Dividends Distributable is reported as a liability on the statement of financial position.

Use the following information for questions Air Ace Corporation issues 5,000 preferred shares for $40 per share. -In the statement of financial position, the effects of the above transaction will be reported under

Most companies in Canada have an unlimited amount of authorized shares.

The effect of the declaration of a cash dividend is to

Retained earnings are occasionally restricted

The statement of changes in equity discloses changes in total shareholders' equity for the period as well as changes in each shareholders' equity account.

A disadvantage of the corporate form of organization is

A stock split results in a transfer at market value from retained earnings to share capital.

A corporation can be organized for the purpose of making a profit or it may be not-for-profit.

If common shares are reacquired at a price less than their average cost and retired, the difference is credited to contributed capital.

A stock split will

The term residual claim refers to a shareholder's right to

Companies reporting under ASPE must disclose earnings per share, but companies reporting under IFRS do not.

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

Diluted earnings per share

Cambridge Corp declared a 5% stock dividend. Will Wales owned 300 shares of Cambridge before the dividend. Cambridge shares were trading at $21 before the dividend. Which of the following will be true after the dividend is distributed?

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

At January 1, 2012, Jay Corporation had a credit balance of $5,450,000 in its retained earnings account. During the year, Jay paid $250,000 in dividends, reported profit of $560,000 and other comprehensive income of $750,000. The December 31 balance of retained earnings is:

Two classifications appearing in the share capital section of the statement of financial position are

Stock Dividends Distributable is reported as a liability on the statement of financial position.

Use the following information for questions Air Ace Corporation issues 5,000 preferred shares for $40 per share. -In the statement of financial position, the effects of the above transaction will be reported under

Most companies in Canada have an unlimited amount of authorized shares.

The effect of the declaration of a cash dividend is to

Retained earnings are occasionally restricted

The statement of changes in equity discloses changes in total shareholders' equity for the period as well as changes in each shareholders' equity account.

A disadvantage of the corporate form of organization is

A stock split results in a transfer at market value from retained earnings to share capital.

A corporation can be organized for the purpose of making a profit or it may be not-for-profit.

If common shares are reacquired at a price less than their average cost and retired, the difference is credited to contributed capital.

A stock split will

The term residual claim refers to a shareholder's right to

Companies reporting under ASPE must disclose earnings per share, but companies reporting under IFRS do not.

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