Question 1

Under the corporate form of business organization,

Accepted Answer

A)  ownership rights are easily transferred 
B)  a stockholder is personally liable for the debts of the corporation 
C)  stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation 
D)  stockholders wishing to sell their corporate shares must get the approval of other stockholders 
A)  ownership rights are easily transferred 
B)  a stockholder is personally liable for the debts of the corporation 
C)  stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation 
D)  stockholders wishing to sell their corporate shares must get the approval of other stockholders

Question 2

Prepare entries to record the following:
(a)Issued 1,000 shares of $15 par common stock at $54 for cash.
(b)Issued 1,400 shares of no-par common stock in exchange for equipment with a fair market price of $24,000.
(c)Purchased 100 shares of treasury stock at $26.
(d)Sold 100 shares of treasury stock purchased in 
(c) at $29.

Accepted Answer

The answer of Prepare entries to record the following:
(a)Issued 1,000...

Question 3

Match each of the following stockholders' equity concepts to the appropriate term (a-h).
-Corporate income distributed to stockholders

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

Question 4

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Accepted Answer

A)  treasury stock 
B)  issued stock 
C)  outstanding stock 
D)  authorized stock 
A)  treasury stock 
B)  issued stock 
C)  outstanding stock 
D)  authorized stock

Question 5

The initial owners of stock of a newly formed corporation are called directors.

Accepted Answer

A) True 
 B)False

Question 6

Match each of 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 7

Match each of the following stockholders' equity concepts to the appropriate term (a-h).
-Shares of common stock that were issued and then reacquired by a company

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 8

Wonder Sales is authorized to issue 100,000 shares of 2%, $100 par preferred stock and 1,000,000 shares of $10 par common stock. Journalize the following transactions:​
(a) On January 2, Wonder Sales issues 5,000 shares of preferred stock for $110 per share and 65,000 shares of common stock at $10 per share.​
(b) On January 25, Wonder Sales issues 250 shares of preferred stock to Morton Law Firm for settlement of a $36,000 invoice for incorporation services.​
(c) On January 31, Wonder Sales issues 500 shares of common stock to Setup Inc. for fixtures that have a fair market value of $8,500.

Accepted Answer

The answer of Wonder Sales is authorized to issue 100,000...

Question 9

Match each of the following stockholders' equity concepts to the appropriate term (a-h).
-A company whose shares can be bought and sold in public markets

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

Question 10

On January 1, Vermont Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20 per share. On February 1, Vermont purchased 3,750 shares of treasury stock for $24 per share and later sold the treasury shares for $21 per share on March 1.​The journal entry to record the purchase of the treasury shares on February 1 would include a

Accepted Answer

A)  credit to Treasury Stock for $90,000 
B)  debit to Treasury Stock for $90,000 
C)  debit to a loss account for $112,500 
D)  credit to a gain account for $112,500 
A)  credit to Treasury Stock for $90,000 
B)  debit to Treasury Stock for $90,000 
C)  debit to a loss account for $112,500 
D)  credit to a gain account for $112,500

Question 11

A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Accepted Answer

A)  increase by $100,000 
B)  increase by $350,000 
C)  decrease by $100,000 
D)  decrease by $350,000 
A)  increase by $100,000 
B)  increase by $350,000 
C)  decrease by $100,000 
D)  decrease by $350,000

Question 12

Which of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)  government regulation 
B)  separate legal existence 
C)  continuous life 
D)  limited liability of stockholders 
A)  government regulation 
B)  separate legal existence 
C)  continuous life 
D)  limited liability of stockholders

Question 13

A disadvantage of the corporate form of business entity is

Accepted Answer

A)  mutual agency for stockholders 
B)  unlimited liability for stockholders 
C)  corporations are subject to more governmental regulations 
D)  the ease of transfer of ownership 
A)  mutual agency for stockholders 
B)  unlimited liability for stockholders 
C)  corporations are subject to more governmental regulations 
D)  the ease of transfer of ownership

Question 14

Prepare entries to record the following selected transactions completed during the current fiscal year:Feb. 1The board of directors declared a stock split that reduced the par of common shares from $100 to $20. This action increased the number of outstanding shares to 500,000.??11Purchased 25,000 shares of the company's own stock at $44, recording the treasury stock at cost.??May 1Declared a dividend of $2.50 per share on the outstanding shares of common stock.??15Paid the dividend declared on May 1.Oct. 19Declared a 2% stock dividend on the common stock outstanding 
(the fair market value of the stock to be issued is $55.)??Nov. 12Issued the certificates for the common stock dividend declared on October 19.?

Accepted Answer

The answer of Prepare entries to record the following selected...

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

Accepted Answer

A)  35,000 
B)  70,000 
C)  25,000 
D)  30,000 
A)  35,000 
B)  70,000 
C)  25,000 
D)  30,000

Question 17

A company has 10,000 shares of $10 par common stock outstanding. Prepare entries to record the following:
(a)Purchased 1,500 shares of treasury stock at $16. The treasury stock is accounted for by the cost method. There were no previous purchases of treasury shares.
(b)Sold 1,000 shares of treasury stock at $19.
(c)Purchased equipment for $80,000, paying $25,000 in cash and issuing 4,000 shares of common stock.
(d)Sold 500 shares of treasury stock at $14.

Accepted Answer

The answer of A company has 10,000 shares of $10...

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The date on which a cash dividend becomes a binding legal obligation is 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 20

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 per share. The effect of the declaration and issuance of the stock dividend is to

Accepted Answer

A)  decrease retained earnings, increase common stock, and increase paid-in capital 
B)  increase retained earnings, decrease common stock, and decrease paid-in capital 
C)  increase retained earnings, decrease common stock, and increase paid-in capital 
D)  decrease retained earnings, increase common stock, and decrease paid-in capital 
A)  decrease retained earnings, increase common stock, and increase paid-in capital 
B)  increase retained earnings, decrease common stock, and decrease paid-in capital 
C)  increase retained earnings, decrease common stock, and increase paid-in capital 
D)  decrease retained earnings, increase common stock, and decrease paid-in capital

Under the corporate form of business organization,

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -Corporate income distributed to stockholders

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

The initial owners of stock of a newly formed corporation are called directors.

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

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -Shares of common stock that were issued and then reacquired by a company

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -A company whose shares can be bought and sold in public markets

A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Which of the following would not be considered an advantage of the corporate form of organization?

A disadvantage of the corporate form of business entity is

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

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

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

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

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 per share. The effect of the declaration and issuance of the stock dividend is to

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters

Exam 13: Corporations: Organization, Stock Transactions, and Dividends

Under the corporate form of business organization,

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -Corporate income distributed to stockholders

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

The initial owners of stock of a newly formed corporation are called directors.

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

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -Shares of common stock that were issued and then reacquired by a company

Match each of the following stockholders' equity concepts to the appropriate term (a-h). -A company whose shares can be bought and sold in public markets

A corporation purchases 10,000 shares of its own $10 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?

Which of the following would not be considered an advantage of the corporate form of organization?

A disadvantage of the corporate form of business entity is

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

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

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

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

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 per share. The effect of the declaration and issuance of the stock dividend is to

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Cost-Volume-Profit Analysis

Evaluating Variances From Standard Costs

Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Filters