Question 1

The trading of a corporation's shares on the secondary market has no impact on the corporation's financial position.

Accepted Answer

A) True 
 B)False

Question 2

Dividends in arrears on cumulative preferred shares

Accepted Answer

A) are considered to be a non-current liability. 
B) are considered to be a current liability. 
C) only occur when preferred dividends have been declared. 
D) should be disclosed in the notes to the financial statements. 
A) are considered to be a non-current liability. 
B) are considered to be a current liability. 
C) only occur when preferred dividends have been declared. 
D) should be disclosed in the notes to the financial statements.

Question 3

Use the following information for questions 
On July 15, 2022, 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, 2022, to shareholders of record on July 31, 2022.
-The effects of the journal entry to record the payment of the dividend on August 15, 2022, are to

Accepted Answer

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

Question 4

If the board of directors authorizes a $250,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

Accepted Answer

A) decrease total assets and total shareholders' equity. 
B) increase shareholders' equity and to decrease total liabilities. 
C) decrease total retained earnings and increase total liabilities. 
D) reduce the amount of retained earnings available for dividend declarations. 
A) decrease total assets and total shareholders' equity. 
B) increase shareholders' equity and to decrease total liabilities. 
C) decrease total retained earnings and increase total liabilities. 
D) reduce the amount of retained earnings available for dividend declarations.

Question 5

Use the following information for questions 
On July 15, 2022, 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, 2022, to shareholders of record on July 31, 2022.
-The effects of the journal entry to record the declaration of the dividend on July 15, 2022, 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 6

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

Accepted Answer

The answer of Indicate the respective effects of the declaration...

Question 7

A corporation records a dividend-related liability

Accepted Answer

A) on the record date. 
B) on the payment date. 
C) when dividends are in arrears. 
D) on the declaration date. 
A) on the record date. 
B) on the payment date. 
C) when dividends are in arrears. 
D) on the declaration date.

Question 8

The return on common shareholders' equity is calculated by dividing net income

Accepted Answer

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

Question 9

Limited liability of shareholders means

Accepted Answer

A) dividends will be paid regardless of net income. 
B) creditors have no legal claim on a shareholder's personal assets. 
C) the life of the corporation is limited. 
D) deferral or reduction of taxes. 
A) dividends will be paid regardless of net income. 
B) creditors have no legal claim on a shareholder's personal assets. 
C) the life of the corporation is limited. 
D) deferral or reduction of taxes.

Question 10

Cash dividends are declared out of

Accepted Answer

A) Dividends Payable. 
B) Preferred Shares. 
C) Common Shares. 
D) Retained Earnings. 
A) Dividends Payable. 
B) Preferred Shares. 
C) Common Shares. 
D) Retained Earnings.

Question 11

Which one of the following is not an ownership right of a common shareholder?

Accepted Answer

A) to vote in the election of officers 
B) to declare dividends on the common shares 
C) to share in assets upon liquidation 
D) to share in corporate net income 
A) to vote in the election of officers 
B) to declare dividends on the common shares 
C) to share in assets upon liquidation 
D) to share in corporate net income

Question 12

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

Question 13

Which of the following is false about the dividend yield ratio?

Accepted Answer

A) Dividend yield ratio = Dividends per share ÷ Market price per share 
B) Measures the net income generated by each share for the shareholder based on the market price of the shares 
C) A low dividend yield is neither bad nor good by itself 
D) Dividend yield ratio = Market price per share ÷ Dividends per share 
A) Dividend yield ratio = Dividends per share ÷ Market price per share 
B) Measures the net income generated by each share for the shareholder based on the market price of the shares 
C) A low dividend yield is neither bad nor good by itself 
D) Dividend yield ratio = Market price per share ÷ Dividends per share

Question 14

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

Accepted Answer

A) The market value of the shares will probably decrease. 
B) A shareholder with 200 shares before the split owns 400 shares after the split. 
C) Legal capital per share is reduced to half of what it was before the split. 
D) Total share capital increases. 
A) The market value of the shares will probably decrease. 
B) A shareholder with 200 shares before the split owns 400 shares after the split. 
C) Legal capital per share is reduced to half of what it was before the split. 
D) Total share capital increases.

Question 15

Which of the following shows the proper effect of a stock split and a stock dividend?

Accepted Answer

The answer of Which of the following shows the proper...

Question 16

Which of the following is the appropriate general journal entry to record the declaration of cash dividends?

Accepted Answer

A) Dividends Declared Cash 
B) Dividends Payable Cash 
C) Share Capital Dividends Payable 
D) Dividends Declared Dividends Payable 
A) Dividends Declared Cash 
B) Dividends Payable Cash 
C) Share Capital Dividends Payable 
D) Dividends Declared Dividends Payable

Question 17

If a company repurchase shares for a price less than the average price of the shares then the difference in price will be a

Accepted Answer

A) debit to retained earnings. 
B) credit retained earnings. 
C) debit to contributed surplus. 
D) credit to contributed surplus. 
A) debit to retained earnings. 
B) credit retained earnings. 
C) debit to contributed surplus. 
D) credit to contributed surplus.

Question 18

Under IFRS, which of the following describes how other comprehensive income should be reported?

Accepted Answer

A) Must be reported in a statement of comprehensive income 
B) Should not be reported in the financial statements, but should only be disclosed in the footnotes 
C) Must be reported in the statement of income 
D) Must be reported in the shareholders' equity section of the statement of financial position 
A) Must be reported in a statement of comprehensive income 
B) Should not be reported in the financial statements, but should only be disclosed in the footnotes 
C) Must be reported in the statement of income 
D) Must be reported in the shareholders' equity section of the statement of financial position

Question 19

A company may repurchase its own shares for all of the following reasons except to

Accepted Answer

A) enhance market value. 
B) reduce market value. 
C) increase basic earnings per share. 
D) have additional shares available for use. 
A) enhance market value. 
B) reduce market value. 
C) increase basic earnings per share. 
D) have additional shares available for use.

Question 20

Coombs Corp.declared a two-for-one stock split.Solly Fogarty owned 500 shares of Coombs that were trading for $20 each before the split.Which of the following is likely to be true after the split?

Accepted Answer

A) The number of shares Solly owns will increase by 50%. 
B) The market price per share will drop by 50%. 
C) The total market value of Solly's shares will double. 
D) The market price per share will increase by 100%. 
A) The number of shares Solly owns will increase by 50%. 
B) The market price per share will drop by 50%. 
C) The total market value of Solly's shares will double. 
D) The market price per share will increase by 100%.

The trading of a corporation's shares on the secondary market has no impact on the corporation's financial position.

Dividends in arrears on cumulative preferred shares

If the board of directors authorizes a $250,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

A corporation records a dividend-related liability

The return on common shareholders' equity is calculated by dividing net income

Limited liability of shareholders means

Cash dividends are declared out of

Which one of the following is not an ownership right of a common shareholder?

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

Which of the following is false about the dividend yield ratio?

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

Which of the following shows the proper effect of a stock split and a stock dividend?

Which of the following is the appropriate general journal entry to record the declaration of cash dividends?

If a company repurchase shares for a price less than the average price of the shares then the difference in price will be a

Under IFRS, which of the following describes how other comprehensive income should be reported?

A company may repurchase its own shares for all of the following reasons except to

Coombs Corp.declared a two-for-one stock split.Solly Fogarty owned 500 shares of Coombs that were trading for $20 each before the split.Which of the following is likely to be true after the split?

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

Exam 11: Reporting and Analyzing Shareholders Equity

The trading of a corporation's shares on the secondary market has no impact on the corporation's financial position.

Dividends in arrears on cumulative preferred shares

If the board of directors authorizes a $250,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections:

A corporation records a dividend-related liability

The return on common shareholders' equity is calculated by dividing net income

Limited liability of shareholders means

Cash dividends are declared out of

Which one of the following is not an ownership right of a common shareholder?

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

Which of the following is false about the dividend yield ratio?

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

Which of the following shows the proper effect of a stock split and a stock dividend?

Which of the following is the appropriate general journal entry to record the declaration of cash dividends?

If a company repurchase shares for a price less than the average price of the shares then the difference in price will be a

Under IFRS, which of the following describes how other comprehensive income should be reported?

A company may repurchase its own shares for all of the following reasons except to

Coombs Corp.declared a two-for-one stock split.Solly Fogarty owned 500 shares of Coombs that were trading for $20 each before the split.Which of the following is likely to be true after the split?

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