Question 1

The number of common shares authorized can never be greater than the number of shares issued.

Accepted Answer

A) True 
 B)False

Question 2

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) cash dividend 
A) net income 
B) stock dividend 
C) stock split 
D) cash dividend

Question 3

When setting the price of a new share issue, a corporation does not need to consider

Accepted Answer

A) future net income. 
B) expected dividend rate. 
C) current financial position. 
D) future trading on the secondary market. 
A) future net income. 
B) expected dividend rate. 
C) current financial position. 
D) future trading on the secondary market.

Question 4

Diluted earnings per share

Accepted Answer

A) is sometimes higher than basic earnings per share. 
B) takes into account all securities issued that can be converted into common shares. 
C) shows how many dollars were earned for each dollar invested by common shareholders. 
D) is not required to be disclosed for corporations reporting under IFRS. 
A) is sometimes higher than basic earnings per share. 
B) takes into account all securities issued that can be converted into common shares. 
C) shows how many dollars were earned for each dollar invested by common shareholders. 
D) is not required to be disclosed for corporations reporting under IFRS.

Question 5

Basic earnings per share is calculated by dividing the net income available to common shareholders by the number of common shares issued at year end.

Accepted Answer

A) True 
 B)False

Question 6

Stock Dividends Distributable is classified as a(n)

Accepted Answer

A) asset account. 
B) shareholders' equity account. 
C) expense account. 
D) liability account. 
A) asset account. 
B) shareholders' equity account. 
C) expense account. 
D) liability account.

Question 7

Investors tend to buy shares with low payout ratios and dividend yields if they are looking for more capital appreciation from the shares.

Accepted Answer

A) True 
 B)False

Question 8

The board of directors of Wessex Inc.declared a cash dividend on November 15, 2022, to be paid on December 15, 2022, to shareholders owning shares on November 30, 2022.Given these facts, the date of November 30, 2022, is referred to as the

Accepted Answer

A) declaration date. 
B) record date. 
C) payment date. 
D) authorization date. 
A) declaration date. 
B) record date. 
C) payment date. 
D) authorization date.

Question 9

Shareholders directly elect the corporation's

Accepted Answer

A) president. 
B) board of directors. 
C) controller. 
D) auditor. 
A) president. 
B) board of directors. 
C) controller. 
D) auditor.

Question 10

Companies reporting under ASPE must disclose basic earnings per share, but companies reporting under IFRS do not.

Accepted Answer

A) True 
 B)False

Question 11

Legal capital

Accepted Answer

A) cannot be distributed to shareholders. 
B) reflects the most recent market price. 
C) is voted on by the shareholders. 
D) is indicative of the worth of the share. 
A) cannot be distributed to shareholders. 
B) reflects the most recent market price. 
C) is voted on by the shareholders. 
D) is indicative of the worth of the share.

Question 12

Legal capital

Accepted Answer

A) can be distributed to shareholders. 
B) does not need to remain invested in the corporation. 
C) can be distributed to shareholders up to the limit of their investment. 
D) cannot be distributed to the shareholders but must remain invested in the corporation. 
A) can be distributed to shareholders. 
B) does not need to remain invested in the corporation. 
C) can be distributed to shareholders up to the limit of their investment. 
D) cannot be distributed to the shareholders but must remain invested in the corporation.

Question 13

Identify the effect the declaration of a cash dividend and a stock dividend has on the total shareholders' equity of a corporation:

Accepted Answer

The answer of Identify the effect the declaration of a...

Question 14

If Tools Corporation issues 5,000 common shares for $200,000, which account will be credited?

Accepted Answer

A) Common Shares 
B) Retained Earnings 
C) Contributed Surplus 
D) Cash 
A) Common Shares 
B) Retained Earnings 
C) Contributed Surplus 
D) Cash

Question 15

Return on common shareholders' equity is calculated by dividing net income by ending shareholders' equity.

Accepted Answer

A) True 
 B)False

Question 16

The liability of a shareholder is usually limited to the shareholder's investment in the corporation.

Accepted Answer

A) True 
 B)False

Question 17

A debit balance in retained earnings is called a

Accepted Answer

A) loss. 
B) capital surplus. 
C) deficit. 
D) contributed surplus. 
A) loss. 
B) capital surplus. 
C) deficit. 
D) contributed surplus.

Question 18

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 19

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

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

Question 20

The sale of shares in a corporation by one shareholder to another affects the total capital of the corporation.

Accepted Answer

A) True 
 B)False

The number of common shares authorized can never be greater than the number of shares issued.

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

When setting the price of a new share issue, a corporation does not need to consider

Diluted earnings per share

Basic earnings per share is calculated by dividing the net income available to common shareholders by the number of common shares issued at year end.

Stock Dividends Distributable is classified as a(n)

Investors tend to buy shares with low payout ratios and dividend yields if they are looking for more capital appreciation from the shares.

The board of directors of Wessex Inc.declared a cash dividend on November 15, 2022, to be paid on December 15, 2022, to shareholders owning shares on November 30, 2022.Given these facts, the date of November 30, 2022, is referred to as the

Shareholders directly elect the corporation's

Companies reporting under ASPE must disclose basic earnings per share, but companies reporting under IFRS do not.

Legal capital

Legal capital

Identify the effect the declaration of a cash dividend and a stock dividend has on the total shareholders' equity of a corporation:

If Tools Corporation issues 5,000 common shares for $200,000, which account will be credited?

Return on common shareholders' equity is calculated by dividing net income by ending shareholders' equity.

The liability of a shareholder is usually limited to the shareholder's investment in the corporation.

A debit balance in retained earnings is called a

A corporate board of directors does not generally

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

The sale of shares in a corporation by one shareholder to another affects the total capital of the corporation.

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

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Exam 11: Reporting and Analyzing Shareholders Equity

The number of common shares authorized can never be greater than the number of shares issued.

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

When setting the price of a new share issue, a corporation does not need to consider

Diluted earnings per share

Basic earnings per share is calculated by dividing the net income available to common shareholders by the number of common shares issued at year end.

Stock Dividends Distributable is classified as a(n)

Investors tend to buy shares with low payout ratios and dividend yields if they are looking for more capital appreciation from the shares.

The board of directors of Wessex Inc.declared a cash dividend on November 15, 2022, to be paid on December 15, 2022, to shareholders owning shares on November 30, 2022.Given these facts, the date of November 30, 2022, is referred to as the

Shareholders directly elect the corporation's

Companies reporting under ASPE must disclose basic earnings per share, but companies reporting under IFRS do not.

Legal capital

Legal capital

Identify the effect the declaration of a cash dividend and a stock dividend has on the total shareholders' equity of a corporation:

If Tools Corporation issues 5,000 common shares for $200,000, which account will be credited?

Return on common shareholders' equity is calculated by dividing net income by ending shareholders' equity.

The liability of a shareholder is usually limited to the shareholder's investment in the corporation.

A debit balance in retained earnings is called a

A corporate board of directors does not generally

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

The sale of shares in a corporation by one shareholder to another affects the total capital of the corporation.

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

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