Question 1

The authorization of share capital will

Accepted Answer

A)  cause shareholders' equity to increase. 
B)  cause the number of common shares issued to increase. 
C)  cause the market price of the shares to fall. 
D)  have no immediate effect on either assets or shareholders' equity. 
A)  cause shareholders' equity to increase. 
B)  cause the number of common shares issued to increase. 
C)  cause the market price of the shares to fall. 
D)  have no immediate effect on either assets or shareholders' equity.

Question 2

A corporate board of directors generally

Accepted Answer

A)  select officers. 
B)  manage sales targets. 
C)  makes everyday purchasing decisions. 
D)  approves vacation periods for top management. 
A)  select officers. 
B)  manage sales targets. 
C)  makes everyday purchasing decisions. 
D)  approves vacation periods for top management.

Question 3

Which group of users is responsible for selecting the company's operating policies and selecting officers such as the CEO?

Accepted Answer

A)  management 
B)  shareholders 
C)  board of directors 
D)  chief financial officer 
A)  management 
B)  shareholders 
C)  board of directors 
D)  chief financial officer

Question 4

Acts of the shareholders who are NOT official agents of a corporation can legally bind a corporation.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements concerning taxation is accurate?

Accepted Answer

A)  Partnerships pay provincial income taxes but not federal income taxes. 
B)  Corporations pay federal income taxes but not provincial income taxes. 
C)  Corporations pay federal and provincial income taxes. 
D)  Income trusts pay federal and provincial income taxes. 
A)  Partnerships pay provincial income taxes but not federal income taxes. 
B)  Corporations pay federal income taxes but not provincial income taxes. 
C)  Corporations pay federal and provincial income taxes. 
D)  Income trusts pay federal and provincial income taxes.

Question 6

On January 1, 2021, Urban Faith Limited had 200,000 common shares issued at an average cost of $ 25 per share. During the year, the following transactions occurred:
May 1 Issued 20,000 common shares for $ 470,000.
Jun 1 Declared a cash dividend of $ 3.50 per share to shareholders of record on June 15.
Jun 25 Issued 10,000 common shares for $ 260,000.
Jun 30 Paid the cash dividend declared on June 1.
Profit for 2021 amounted to $ 885,000.
Instructions
Prepare journal entries to record the above transactions assuming Urban Faith has a December 31 year end. Be sure to prepare the appropriate closing entries at December 31, 2021.

Accepted Answer

The answer of On January 1, 2021, Urban Faith Limited...

Question 7

Cordoza Corporation had profit of $ 400,000 in 2021. Total shareholders' equity was $ 1,400,000 at December 31, 2019; $ 1,500,000 at December 31, 2020; and $ 1,600,000 at December 31, 2021.
Instructions
Calculate return on equity for 2021 and explain what it means.

Accepted Answer

Profit ÷ Average shareholders' equity =

Question 8

Organization costs are normally capitalized by public companies.

Accepted Answer

A) True 
 B)False

Question 9

Accounting entries are required for dividends on which of the following two dates?

Accepted Answer

A)  date of declaration and the date of record 
B)  date of record and the date of payment 
C)  date of declaration and the date of payment 
D)  date of record and the date of declaration 
A)  date of declaration and the date of record 
B)  date of record and the date of payment 
C)  date of declaration and the date of payment 
D)  date of record and the date of declaration

Question 10

The statement of retained earnings

Accepted Answer

A)  is required as part of the financial statements under ASPE. 
B)  will show income taxes paid during the year. 
C)  will never show losses. 
D)  will, in some cases, fail to reconcile the beginning and ending retained earnings balances. 
A)  is required as part of the financial statements under ASPE. 
B)  will show income taxes paid during the year. 
C)  will never show losses. 
D)  will, in some cases, fail to reconcile the beginning and ending retained earnings balances.

Question 11

Journal entries are made on the date of declaration and on the date of record date.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

The trial balance of Terris Inc. for the year ended September 30, 2021, prior to recording of tax expenses, but after all other adjustments, is as follows. All accounts are their normal balance (debit or credit). Terris has a tax rate of 30%.   Instructions
Prepare the income statement and statement of retained earnings for Terris Inc. for the year ended September 30, 2021.

Accepted Answer

The answer of The trial balance of Terris Inc. for...

Question 14

The dominant form of business organization in Canada is

Accepted Answer

A)  the proprietorship. 
B)  the partnership. 
C)  the corporation. 
D)  not known. 
A)  the proprietorship. 
B)  the partnership. 
C)  the corporation. 
D)  not known.

Question 15

Norton Corporation has the following shareholders equity on September 30, 2021:   On September 15, 2021, Norton Corporation declared a $ 170,000 dividend to be paid on October 15 to shareholders of record on September 30. Assuming that the preferred dividends have NOT been paid since 2019 the amount of dividends per common share for 2021 would be

Accepted Answer

A)  $ 17. 
B)  $ 2. 
C)  $ 0.10. 
D)  $ 10. 
A)  $ 17. 
B)  $ 2. 
C)  $ 0.10. 
D)  $ 10.

Question 16

The articles of incorporation can contain all of the following EXCEPT

Accepted Answer

A)  the name of the proposed corporation. 
B)  the purpose of the proposed corporation. 
C)  the names and addresses of the incorporators. 
D)  the names and addresses of the senior management team. 
A)  the name of the proposed corporation. 
B)  the purpose of the proposed corporation. 
C)  the names and addresses of the incorporators. 
D)  the names and addresses of the senior management team.

Question 17

Which of the following is NOT a component of the statement of retained earnings?

Accepted Answer

A)  net income 
B)  dividends 
C)  beginning balance of retained earnings 
D)  preferred shares 
A)  net income 
B)  dividends 
C)  beginning balance of retained earnings 
D)  preferred shares

Question 18

The following information is available for Mobily Corporation.   What is the ending retained earnings balance?

Accepted Answer

A)  $ 38,000 
B)  $ 65,000 
C)  $ 132,000 
D)  $ 145,000 
A)  $ 38,000 
B)  $ 65,000 
C)  $ 132,000 
D)  $ 145,000

Question 19

Sonoma Lakes Ltd. (SLL) has the following authorized share capital:
Unlimited Common voting shares
500,000 Class A, $ 5 cumulative preferred shares
500,000 Class B, $ 10 noncumulative preferred shares
During 2021, SLL had the following share transactions for cash:
Jan 1 Issued 50,000 common shares for $ 100,000.
Mar 12 Issued 1,000 Class A preferred shares for $ 60,000.
Apr 30 Issued 20,000 common shares for $ 2.50 per share.
Jun 20 Issued 3,000 Class B preferred shares for $ 70 per share.
SLL did not declare any dividends during 2021. On December 31, 2022 a dividend of $ 3 per share was declared on preferred shares issued.
Instructions
a) Journalize the share transactions.
b) Calculate the number of common shares issued at December 31, 2021.
c) Calculate the amount of the December 31, 2022 total dividend declared and the amount of dividends in arrears after declaring the December 31, 2022 dividend.

Accepted Answer

The answer of Sonoma Lakes Ltd. (SLL) has the following...

Question 20

If a corporation has only one class of shares, they are referred to as

Accepted Answer

A)  classless shares. 
B)  preferred shares. 
C)  limited liability shares. 
D)  common shares. 
A)  classless shares. 
B)  preferred shares. 
C)  limited liability shares. 
D)  common shares.

The authorization of share capital will

A corporate board of directors generally

Which group of users is responsible for selecting the company's operating policies and selecting officers such as the CEO?

Acts of the shareholders who are NOT official agents of a corporation can legally bind a corporation.

Which of the following statements concerning taxation is accurate?

Cordoza Corporation had profit of $ 400,000 in 2021. Total shareholders' equity was $ 1,400,000 at December 31, 2019; $ 1,500,000 at December 31, 2020; and $ 1,600,000 at December 31, 2021. Instructions Calculate return on equity for 2021 and explain what it means.

Organization costs are normally capitalized by public companies.

Accounting entries are required for dividends on which of the following two dates?

The statement of retained earnings

Journal entries are made on the date of declaration and on the date of record date.

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

The dominant form of business organization in Canada is

The articles of incorporation can contain all of the following EXCEPT

Which of the following is NOT a component of the statement of retained earnings?

The following information is available for Mobily Corporation. What is the ending retained earnings balance?

If a corporation has only one class of shares, they are referred to as

Long-Lived Assets

Current Liabilities and Payroll

Financial Reporting Concepts

Accounting for Partnerships

Corporations: Additional Topics and IFRS

Non-Current Liabilities

Investments

The Cash Flow Statement

Financial Statement Analysis

Understanding Interest, Annuities, and Bond Valuation

Filters

Exam 5: Introduction to Corporations

The authorization of share capital will

A corporate board of directors generally

Which group of users is responsible for selecting the company's operating policies and selecting officers such as the CEO?

Acts of the shareholders who are NOT official agents of a corporation can legally bind a corporation.

Which of the following statements concerning taxation is accurate?

Cordoza Corporation had profit of $ 400,000 in 2021. Total shareholders' equity was $ 1,400,000 at December 31, 2019; $ 1,500,000 at December 31, 2020; and $ 1,600,000 at December 31, 2021. Instructions Calculate return on equity for 2021 and explain what it means.

Organization costs are normally capitalized by public companies.

Accounting entries are required for dividends on which of the following two dates?

The statement of retained earnings

Journal entries are made on the date of declaration and on the date of record date.

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

The dominant form of business organization in Canada is

The articles of incorporation can contain all of the following EXCEPT

Which of the following is NOT a component of the statement of retained earnings?

The following information is available for Mobily Corporation. What is the ending retained earnings balance?

If a corporation has only one class of shares, they are referred to as

Long-Lived Assets

Current Liabilities and Payroll

Financial Reporting Concepts

Accounting for Partnerships

Corporations: Additional Topics and IFRS

Non-Current Liabilities

Investments

The Cash Flow Statement

Financial Statement Analysis

Understanding Interest, Annuities, and Bond Valuation

Filters