Question 1

The two ways that a corporation can be classified by ownership are

Accepted Answer

A) publicly held and privately held. 
B) stock and non-stock. 
C) inside and outside. 
D) majority and minority. 
A) publicly held and privately held. 
B) stock and non-stock. 
C) inside and outside. 
D) majority and minority.

Question 2

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures.   What is the return on common stockholders' equity ratio for Benedict?

Accepted Answer

A) 16.7% 
B) 12.0% 
C) 13.3% 
D) 9.0% 
A) 16.7% 
B) 12.0% 
C) 13.3% 
D) 9.0%

Question 3

All of the following statements regarding retained earnings are true except

Accepted Answer

A) retained earnings represents a claim on cash. 
B) a debit balance in Retained Earnings indicates a deficit. 
C) some companies may restrict the availability of retained earnings for dividends. 
D) retained earnings is net income that a company retains in a business. 
A) retained earnings represents a claim on cash. 
B) a debit balance in Retained Earnings indicates a deficit. 
C) some companies may restrict the availability of retained earnings for dividends. 
D) retained earnings is net income that a company retains in a business.

Question 4

Which of the following statements is not true about a 2-for-1 split?

Accepted Answer

A) Par value per share is reduced to half of what it was before the split. 
B) Total contributed capital increases. 
C) The market price probably will decrease. 
D) A stockholder with ten shares before the split owns twenty shares after the split. 
A) Par value per share is reduced to half of what it was before the split. 
B) Total contributed capital increases. 
C) The market price probably will decrease. 
D) A stockholder with ten shares before the split owns twenty shares after the split.

Question 5

Which of the following factors does not affect the initial market price of a stock?

Accepted Answer

A) The company's anticipated future earnings. 
B) The par value of the stock. 
C) The current state of the economy. 
D) The expected dividend rate per share. 
A) The company's anticipated future earnings. 
B) The par value of the stock. 
C) The current state of the economy. 
D) The expected dividend rate per share.

Question 6

YZ Company has $20,000 of dividends in arrears.Based on this information, which of the following statements is false?

Accepted Answer

A) Dividends in arrears are not considered to be liabilities. 
B) An obligation for dividends in arrears exists only after the board of directors declares payment. 
C) The investment community looks favorably on companies with dividends in arrears since the money is redirected toward more important growth opportunities. 
D) The amount of dividends in arrears should be disclosed in the notes to the financial statements. 
A) Dividends in arrears are not considered to be liabilities. 
B) An obligation for dividends in arrears exists only after the board of directors declares payment. 
C) The investment community looks favorably on companies with dividends in arrears since the money is redirected toward more important growth opportunities. 
D) The amount of dividends in arrears should be disclosed in the notes to the financial statements.

Question 7

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Accepted Answer

A) Common Stock will be credited for $185,000. 
B) Paid-in Capital in Excess of Par Value will be credited for $210,000. 
C) Paid-in Capital in Excess of Par Value will be credited for $235,000. 
D) Cash will be debited for $210,000. 
A) Common Stock will be credited for $185,000. 
B) Paid-in Capital in Excess of Par Value will be credited for $210,000. 
C) Paid-in Capital in Excess of Par Value will be credited for $235,000. 
D) Cash will be debited for $210,000.

Question 8

Nance Corporation's December 31, 2020 balance sheet showed the following:   Nance's total paid-in capital was

Accepted Answer

A) $47,960,000. 
B) $48,590,000. 
C) $47,330,000. 
D) $28,060,000. 
A) $47,960,000. 
B) $48,590,000. 
C) $47,330,000. 
D) $28,060,000.

Question 9

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

Question 10

Which of the following is not a significant date with respect to dividends?

Accepted Answer

A) The declaration date. 
B) The incorporation date. 
C) The record date. 
D) The payment date. 
A) The declaration date. 
B) The incorporation date. 
C) The record date. 
D) The payment date.

Question 11

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

Accepted Answer

A) Limited liability of stockholders. 
B) Separate legal existence. 
C) Continuous life. 
D) Government regulation. 
A) Limited liability of stockholders. 
B) Separate legal existence. 
C) Continuous life. 
D) Government regulation.

Question 12

Treasury Stock is a(n)

Accepted Answer

A) contra asset account. 
B) retained earnings account. 
C) asset account. 
D) contra stockholders' equity account. 
A) contra asset account. 
B) retained earnings account. 
C) asset account. 
D) contra stockholders' equity account.

Question 13

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 14

A disadvantage of the corporate form of business 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 15

S.Lawyer performed legal services for E.Corp.Due to a cash shortage, an agreement was reached whereby E.Corp.would pay S.Lawyer a legal fee of approximately $20,000 by issuing 8,000 shares of its common stock (par $1).The stock trades on a daily basis and the market price of the stock on the day the debt was settled is $2.40 per share.Given this information, the best journal entry for E.Corp.to record for this transaction is

Accepted Answer

The answer of S.Lawyer performed legal services for E.Corp.Due to...

Question 16

On January 1, McCarver Corporation had 800,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15/share.As a result of this event,

Accepted Answer

A) McCarver's Paid-in Capital in Excess of Par Value account increased $400,000. 
B) McCarver's total stockholders' equity was unaffected. 
C) McCarver's Stock Dividends account increased $1,200,000. 
D) All of these answer choices are correct. 
A) McCarver's Paid-in Capital in Excess of Par Value account increased $400,000. 
B) McCarver's total stockholders' equity was unaffected. 
C) McCarver's Stock Dividends account increased $1,200,000. 
D) All of these answer choices are correct.

Question 17

Preferred stock has contractual preference over common stock in certain areas.

Accepted Answer

A) True 
 B)False

Question 18

Treasury stock should not be classified as a current asset.

Accepted Answer

A) True 
 B)False

Question 19

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 20

Treasury stock should be reported in the financial statements of a corporation as a(n)

Accepted Answer

A) investment. 
B) liability. 
C) deduction from total paid-in capital. 
D) deduction from total paid-in capital and retained earnings. 
A) investment. 
B) liability. 
C) deduction from total paid-in capital. 
D) deduction from total paid-in capital and retained earnings.

The two ways that a corporation can be classified by ownership are

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. What is the return on common stockholders' equity ratio for Benedict?

All of the following statements regarding retained earnings are true except

Which of the following statements is not true about a 2-for-1 split?

Which of the following factors does not affect the initial market price of a stock?

YZ Company has $20,000 of dividends in arrears.Based on this information, which of the following statements is false?

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Nance Corporation's December 31, 2020 balance sheet showed the following: Nance's total paid-in capital was

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

Which of the following is not a significant date with respect to dividends?

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

Treasury Stock is a(n)

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

A disadvantage of the corporate form of business is

On January 1, McCarver Corporation had 800,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15/share.As a result of this event,

Preferred stock has contractual preference over common stock in certain areas.

Treasury stock should not be classified as a current asset.

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Treasury stock should be reported in the financial statements of a corporation as a(n)

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 Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

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Exam 11: Reporting and Analyzing Stockholders Equity

The two ways that a corporation can be classified by ownership are

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. What is the return on common stockholders' equity ratio for Benedict?

All of the following statements regarding retained earnings are true except

Which of the following statements is not true about a 2-for-1 split?

Which of the following factors does not affect the initial market price of a stock?

YZ Company has $20,000 of dividends in arrears.Based on this information, which of the following statements is false?

If Pratt Company issues 5,000 shares of $5 par value common stock for $210,000, the account

Nance Corporation's December 31, 2020 balance sheet showed the following: Nance's total paid-in capital was

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

Which of the following is not a significant date with respect to dividends?

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

Treasury Stock is a(n)

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

A disadvantage of the corporate form of business is

On January 1, McCarver Corporation had 800,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15/share.As a result of this event,

Preferred stock has contractual preference over common stock in certain areas.

Treasury stock should not be classified as a current asset.

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Treasury stock should be reported in the financial statements of a corporation as a(n)

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 Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Understanding Investments in Debt and Equity Securities

Filters