Question 1

A corporate board of directors does not generally

Accepted Answer

A) select officers. 
B) formulate operating policies. 
C) declare dividends. 
D) execute policy. 
A) select officers. 
B) formulate operating policies. 
C) declare dividends. 
D) execute policy.

Question 2

The return on common stockholders' equity is computed by dividing net income

Accepted Answer

A) by ending common stockholders' equity. 
B) by average common stockholders' equity. 
C) less preferred dividends by ending common stockholders' equity. 
D) less preferred dividends by average common stockholders' equity. 
A) by ending common stockholders' equity. 
B) by average common stockholders' equity. 
C) less preferred dividends by ending common stockholders' equity. 
D) less preferred dividends by average common stockholders' equity.

Question 3

Par value

Accepted Answer

A) represents what a share of stock is worth. 
B) represents the original selling price for a share of stock. 
C) is established for a share of stock after it is issued. 
D) is the value assigned per share in the corporate charter. 
A) represents what a share of stock is worth. 
B) represents the original selling price for a share of stock. 
C) is established for a share of stock after it is issued. 
D) is the value assigned per share in the corporate charter.

Question 4

On January 1, Hamblin Corporation had 120,000 shares of $10 par value common stock outstanding.On March 17, the company declared a 10% stock dividend to stockholders of record on March 20.The market value of the stock was $13 on March 17.The stock was distributed on March 30.The entry to record the transaction of March 30 would include a

Accepted Answer

A) credit to Cash for $120,000. 
B) debit to Common Stock Dividends Distributable for $120,000. 
C) credit to Paid-in Capital in Excess of Par Value for $36,000. 
D) debit to Stock Dividends for $36,000. 
A) credit to Cash for $120,000. 
B) debit to Common Stock Dividends Distributable for $120,000. 
C) credit to Paid-in Capital in Excess of Par Value for $36,000. 
D) debit to Stock Dividends for $36,000.

Question 5

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures.   What is the payout ratio for Benedict?

Accepted Answer

A) 48% 
B) 20% 
C) 28% 
D) 5% 
A) 48% 
B) 20% 
C) 28% 
D) 5%

Question 6

The net effects on the corporation of the declaration and payment of a cash dividend are to

Accepted Answer

A) decrease liabilities and decrease stockholders' equity. 
B) increase stockholders' equity and decrease liabilities. 
C) decrease assets and decrease stockholders' equity. 
D) increase assets and increase stockholders' equity. 
A) decrease liabilities and decrease stockholders' equity. 
B) increase stockholders' equity and decrease liabilities. 
C) decrease assets and decrease stockholders' equity. 
D) increase assets and increase stockholders' equity.

Question 7

Of the four dividends types, the two most common types in practice are

Accepted Answer

A) cash and scrip. 
B) cash and property. 
C) cash and stock. 
D) property and stock. 
A) cash and scrip. 
B) cash and property. 
C) cash and stock. 
D) property and stock.

Question 8

Information that is not generally reported for each class of stock on the balance sheet is

Accepted Answer

A) the market value. 
B) the par value. 
C) shares authorized. 
D) shares issued. 
A) the market value. 
B) the par value. 
C) shares authorized. 
D) shares issued.

Question 9

If common stock is issued for an amount greater than par value, the excess should be credited to

Accepted Answer

A) Cash. 
B) Retained Earnings. 
C) Paid-in Capital in Excess of Par Value. 
D) Legal Capital. 
A) Cash. 
B) Retained Earnings. 
C) Paid-in Capital in Excess of Par Value. 
D) Legal Capital.

Question 10

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A) $2,690,000. 
B) $2,930,000. 
C) $3,050,000. 
D) $2,180,000. 
A) $2,690,000. 
B) $2,930,000. 
C) $3,050,000. 
D) $2,180,000.

Question 11

The acquisition of treasury stock by a corporation

Accepted Answer

A) increases its total assets and total stockholders' equity. 
B) decreases its total assets and total stockholders' equity. 
C) has no effect on total assets and total stockholders' equity. 
D) requires that a gain or loss be recognized on the income statement. 
A) increases its total assets and total stockholders' equity. 
B) decreases its total assets and total stockholders' equity. 
C) has no effect on total assets and total stockholders' equity. 
D) requires that a gain or loss be recognized on the income statement.

Question 12

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a

Accepted Answer

A) debit to Cash Dividends. 
B) credit to Cash Dividends. 
C) credit to Dividends Payable. 
D) debit to Dividends Payable. 
A) debit to Cash Dividends. 
B) credit to Cash Dividends. 
C) credit to Dividends Payable. 
D) debit to Dividends Payable.

Question 13

Nance Corporation's December 31, 2020 balance sheet showed the following:   Nance declared and paid a $85,000 cash dividend on December 15, 2020.If the company's dividends in arrears prior to that date were $24,000, Nance's common stockholders received

Accepted Answer

A) $61,000. 
B) $48,000. 
C) $37,000. 
D) no dividend. 
A) $61,000. 
B) $48,000. 
C) $37,000. 
D) no dividend.

Question 14

Outstanding stock of the Hall Corporation included 40,000 shares of $5 par common stock and 20,000 shares of 5%, $10 par non-cumulative preferred stock.In 2019, Hall declared and paid dividends of $8,000.In 2020, Hall declared and paid dividends of $24,000.How much of the 2020 dividend was distributed to preferred shareholders?

Accepted Answer

A) $14,000. 
B) $18,000. 
C) $10,000. 
D) None of these answer choices are correct. 
A) $14,000. 
B) $18,000. 
C) $10,000. 
D) None of these answer choices are correct.

Question 15

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

Accepted Answer

A) The market value of the stock will probably decrease. 
B) A stockholder with 5 shares before the split owns 10 shares after the split. 
C) Par value per share is reduced to half of what it was before the split. 
D) Total paid-in capital increases. 
A) The market value of the stock will probably decrease. 
B) A stockholder with 5 shares before the split owns 10 shares after the split. 
C) Par value per share is reduced to half of what it was before the split. 
D) Total paid-in capital increases.

Question 16

A stock split will

Accepted Answer

A) have no effect on retained earnings. 
B) increase total paid-in capital. 
C) increase the total par value of the stock. 
D) have no effect on the par value per share of stock. 
A) have no effect on retained earnings. 
B) increase total paid-in capital. 
C) increase the total par value of the stock. 
D) have no effect on the par value per share of stock.

Question 17

Retro Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share.If Retro issues 10,000 shares of common stock to pay its recent attorney's bill of $50,000 for legal services on a land access dispute, which of the following would be the best journal entry for Retro to record?

Accepted Answer

The answer of Retro Company is authorized to issue 10,000...

Question 18

Dividends in arrears are liabilities of the corporation.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not affect the balance of the Retained Earnings account?

Accepted Answer

A) Net income. 
B) Stock dividend. 
C) Stock split. 
D) Gains and losses of a company. 
A) Net income. 
B) Stock dividend. 
C) Stock split. 
D) Gains and losses of a company.

Question 20

The per share amount normally assigned by the board of directors to a large stock dividend is

Accepted Answer

A) the market value of the stock on the date of declaration. 
B) the average price paid by stockholders on outstanding shares. 
C) the par or stated value of the stock. 
D) zero. 
A) the market value of the stock on the date of declaration. 
B) the average price paid by stockholders on outstanding shares. 
C) the par or stated value of the stock. 
D) zero.

A corporate board of directors does not generally

The return on common stockholders' equity is computed by dividing net income

Par value

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. What is the payout ratio for Benedict?

The net effects on the corporation of the declaration and payment of a cash dividend are to

Of the four dividends types, the two most common types in practice are

Information that is not generally reported for each class of stock on the balance sheet is

If common stock is issued for an amount greater than par value, the excess should be credited to

What is the total stockholders' equity based on the following account balances?

The acquisition of treasury stock by a corporation

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a

Nance Corporation's December 31, 2020 balance sheet showed the following: Nance declared and paid a $85,000 cash dividend on December 15, 2020.If the company's dividends in arrears prior to that date were $24,000, Nance's common stockholders received

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

A stock split will

Dividends in arrears are liabilities of the corporation.

Which of the following would not affect the balance of the Retained Earnings account?

The per share amount normally assigned by the board of directors to a large stock dividend is

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

A corporate board of directors does not generally

The return on common stockholders' equity is computed by dividing net income

Par value

The following information pertains to Benedict Company.Assume that all balance sheet amounts represent average balance figures. What is the payout ratio for Benedict?

The net effects on the corporation of the declaration and payment of a cash dividend are to

Of the four dividends types, the two most common types in practice are

Information that is not generally reported for each class of stock on the balance sheet is

If common stock is issued for an amount greater than par value, the excess should be credited to

What is the total stockholders' equity based on the following account balances?

The acquisition of treasury stock by a corporation

The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2020.The dividend is to be paid on August 15, 2020, to stockholders of record on July 31, 2020.The correct entry to be recorded on August 15, 2020, will include a

Nance Corporation's December 31, 2020 balance sheet showed the following: Nance declared and paid a $85,000 cash dividend on December 15, 2020.If the company's dividends in arrears prior to that date were $24,000, Nance's common stockholders received

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

A stock split will

Dividends in arrears are liabilities of the corporation.

Which of the following would not affect the balance of the Retained Earnings account?

The per share amount normally assigned by the board of directors to a large stock dividend is

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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