Question 1

When shares are repurchased for less than their cost, the difference is recognized as

Accepted Answer

A)  contributed surplus. 
B)  ordinary gains. 
C)  extraordinary gains. 
D)  an increase to retained earnings. 
A)  contributed surplus. 
B)  ordinary gains. 
C)  extraordinary gains. 
D)  an increase to retained earnings. A

Question 2

Which of the following statements is true?

Accepted Answer

A)  Dividends are guaranteed to preferred shareholders. 
B)  Dividends accumulate on common shares. 
C)  Dividends are only issued if the board of directors declares them. 
D)  Dividends are paid to all classes of shares on the same basis. 
A)  Dividends are guaranteed to preferred shareholders. 
B)  Dividends accumulate on common shares. 
C)  Dividends are only issued if the board of directors declares them. 
D)  Dividends are paid to all classes of shares on the same basis. C

Question 3

Public companies cannot pay a dividend on the date of declaration.

Accepted Answer

A) True 
 B)False  False

Question 4

The dividend payout ratio measures

Accepted Answer

A)  the portion of a company's earnings that are distributed as dividends. 
B)  the dividends an investor will receive relative to the share price. 
C)  accounting earnings to market price. 
D)  none of the above. 
A)  the portion of a company's earnings that are distributed as dividends. 
B)  the dividends an investor will receive relative to the share price. 
C)  accounting earnings to market price. 
D)  none of the above.

Question 5

Dividends NOT declared in one year carry over to the next year for

Accepted Answer

A)  cumulative preferred shares. 
B)  cumulative common shares. 
C)  arrears shares. 
D)  pre-emptive shares. 
A)  cumulative preferred shares. 
B)  cumulative common shares. 
C)  arrears shares. 
D)  pre-emptive shares.

Question 6

Which of the following happens at the date of record?

Accepted Answer

A)  Dr. Dividends Declared, Cr. Dividends Payable 
B)  Dr. Dividends Declared, Cr. Cash 
C)  No entry is made in the accounts, but a list of shareholders entitled to receive the dividend is prepared. 
D)  The board of directors approves the dividend but no entry is made in the accounts. 
A)  Dr. Dividends Declared, Cr. Dividends Payable 
B)  Dr. Dividends Declared, Cr. Cash 
C)  No entry is made in the accounts, but a list of shareholders entitled to receive the dividend is prepared. 
D)  The board of directors approves the dividend but no entry is made in the accounts.

Question 7

Common shareholders have the right to vote at shareholder meetings.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is the largest number of shares?

Accepted Answer

A)  outstanding shares 
B)  authorized shares 
C)  issued shares 
D)  approved shares 
A)  outstanding shares 
B)  authorized shares 
C)  issued shares 
D)  approved shares

Question 9

Stock dividends are accounted for using the fair market value of the shares on the date of declaration.

Accepted Answer

A) True 
 B)False

Question 10

Repurchasing shares

Accepted Answer

A)  increases the number of shares outstanding. 
B)  decreases the number of shares outstanding. 
C)  has no effect on the number of shares outstanding. 
D)  splits shares in half. 
A)  increases the number of shares outstanding. 
B)  decreases the number of shares outstanding. 
C)  has no effect on the number of shares outstanding. 
D)  splits shares in half.

Question 11

Which of the following happens at the date of declaration?

Accepted Answer

A)  Dr. Dividends Expense, Cr. Dividends Declared 
B)  Dr. Dividends Declared, Cr. Cash 
C)  Dr. Dividends Declared, Cr. Dividends Payable 
D)  The board of directors approves the dividend but no entry is made in the accounts. 
A)  Dr. Dividends Expense, Cr. Dividends Declared 
B)  Dr. Dividends Declared, Cr. Cash 
C)  Dr. Dividends Declared, Cr. Dividends Payable 
D)  The board of directors approves the dividend but no entry is made in the accounts.

Question 12

A 2-for-1 stock split should have the effect of cutting the market price per share in half.

Accepted Answer

A) True 
 B)False

Question 13

The repurchase of shares may result in a recognizable gain or loss.

Accepted Answer

A) True 
 B)False

Question 14

Convertible preferred shares can be converted, at the option of the company, into other types of preferred shares.

Accepted Answer

A) True 
 B)False

Question 15

The articles of incorporation include all of the following EXCEPT

Accepted Answer

A)  what kinds of shares are to be issued. 
B)  the costs of issuing the shares. 
C)  the type of business to be conducted. 
D)  how the board of directors is organized. 
A)  what kinds of shares are to be issued. 
B)  the costs of issuing the shares. 
C)  the type of business to be conducted. 
D)  how the board of directors is organized.

Question 16

Pre-emptive rights prevent ownership interests from being diluted.

Accepted Answer

A) True 
 B)False

Question 17

Life and Leaders Ltd. is a public company trading on the Toronto Stock Exchange. The company's shares are currently trading for $16.00 per share. Life and Leaders just released the following information related to its 2017 year-end:   For 2017, the company's earnings per share were closest to

Accepted Answer

A)  $7.63. 
B)  $6.98. 
C)  $6.50. 
D)  cannot be calculated with the information provided. 
A)  $7.63. 
B)  $6.98. 
C)  $6.50. 
D)  cannot be calculated with the information provided.

Question 18

All companies are obligated to declare dividends.

Accepted Answer

A) True 
 B)False

Question 19

Use the following information for questions 65-67.
Lakeshore Co. has $200,000 of no par value 4% cumulative preferred shares, and 12,000 shares of no par value common shares outstanding. In its first three years of operation, the company paid cash dividends as follows: Year 1: $8,000; Year 2: $18,000; and Year 3: $24,000.
-The amount of dividends received by the preferred shareholders in year 2 was

Accepted Answer

A)  $8,000. 
B)  $9,000. 
C)  $12,000. 
D)  $18,000. 
A)  $8,000. 
B)  $9,000. 
C)  $12,000. 
D)  $18,000.

Question 20

Repurchasing shares increases the number of shares outstanding.

Accepted Answer

A) True 
 B)False

When shares are repurchased for less than their cost, the difference is recognized as

Which of the following statements is true?

Public companies cannot pay a dividend on the date of declaration.

The dividend payout ratio measures

Dividends NOT declared in one year carry over to the next year for

Which of the following happens at the date of record?

Common shareholders have the right to vote at shareholder meetings.

Which of the following is the largest number of shares?

Stock dividends are accounted for using the fair market value of the shares on the date of declaration.

Repurchasing shares

Which of the following happens at the date of declaration?

A 2-for-1 stock split should have the effect of cutting the market price per share in half.

The repurchase of shares may result in a recognizable gain or loss.

Convertible preferred shares can be converted, at the option of the company, into other types of preferred shares.

The articles of incorporation include all of the following EXCEPT

Pre-emptive rights prevent ownership interests from being diluted.

Life and Leaders Ltd. is a public company trading on the Toronto Stock Exchange. The company's shares are currently trading for $16.00 per share. Life and Leaders just released the following information related to its 2017 year-end: For 2017, the company's earnings per share were closest to

All companies are obligated to declare dividends.

Repurchasing shares increases the number of shares outstanding.

Overview of Corporate Financial Reporting

Nalyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Incom

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Long-Term Liabilities

Financial Statement Analysis

Filters

Exam 11: Shareholders Equity

When shares are repurchased for less than their cost, the difference is recognized as

Which of the following statements is true?

Public companies cannot pay a dividend on the date of declaration.

The dividend payout ratio measures

Dividends NOT declared in one year carry over to the next year for

Which of the following happens at the date of record?

Common shareholders have the right to vote at shareholder meetings.

Which of the following is the largest number of shares?

Stock dividends are accounted for using the fair market value of the shares on the date of declaration.

Repurchasing shares

Which of the following happens at the date of declaration?

A 2-for-1 stock split should have the effect of cutting the market price per share in half.

The repurchase of shares may result in a recognizable gain or loss.

Convertible preferred shares can be converted, at the option of the company, into other types of preferred shares.

The articles of incorporation include all of the following EXCEPT

Pre-emptive rights prevent ownership interests from being diluted.

Life and Leaders Ltd. is a public company trading on the Toronto Stock Exchange. The company's shares are currently trading for $16.00 per share. Life and Leaders just released the following information related to its 2017 year-end: For 2017, the company's earnings per share were closest to

All companies are obligated to declare dividends.

Repurchasing shares increases the number of shares outstanding.

Overview of Corporate Financial Reporting

Nalyzing Transaction and Their Effect on Financial Statement

Double-Entry Accounting and the Accounting Cycle

Revenue Recognition and the Statement of Incom

Revenue Recognition and the Statement of Income

The Statement of Cash Flows

Cash and Accounts

Inventory

Long-Term Assets

Long-Term Liabilities

Financial Statement Analysis

Filters