Question 1

The advantage of debiting a Cash Dividend account, instead of Retained Earnings, is that

Accepted Answer

A)  no closing entry is required at the end of the accounting period. 
B)  it allows users to pay the dividends much earlier. 
C)  it makes it easy to keep track of the dividends declared. 
D)  Cash Dividend is permanent account whereas Retained Earnings is a temporary account. 
A)  no closing entry is required at the end of the accounting period. 
B)  it allows users to pay the dividends much earlier. 
C)  it makes it easy to keep track of the dividends declared. 
D)  Cash Dividend is permanent account whereas Retained Earnings is a temporary account.

Question 2

A cumulative dividend feature will mean that unpaid dividends from prior periods will be paid before the current dividend entitlement.

Accepted Answer

A) True 
 B)False

Question 3

RD Holdings Ltd. which has authorized share capital of an unlimited number of common shares, and 1,000,000 preferred shares, had the following share transactions during 2021, its first year of operations:   Instructions 
a) Record the 2021 share transactions.
b) Prepare the share capital section of RD Holdings' balance sheet at December 31, 2021.

Accepted Answer

The answer of RD Holdings Ltd. which has authorized share...

Question 4

Dividends in arrears

Accepted Answer

A)  are always considered a liability. 
B)  are a liability when they are declared. 
C)  are never considered to be a liability. 
D)  are paid to preferred shareholders only after common shareholders receive their dividends. 
A)  are always considered a liability. 
B)  are a liability when they are declared. 
C)  are never considered to be a liability. 
D)  are paid to preferred shareholders only after common shareholders receive their dividends.

Question 5

At December 31, 2021, Kiss Corporation reports revenue of $ 5,750,000 and expenses of $ 3,920,000. The company has a tax rate of 27%. During the year, the company declared and paid dividends of $ 650,000.
Instructions
Prepare an income statement and record the adjustment to income taxes assuming no taxes have yet been accrued.

Accepted Answer

The answer of At December 31, 2021, Kiss Corporation reports...

Question 6

The ownership of the shares is determined on the date of declaration.

Accepted Answer

A) True 
 B)False

Question 7

Income tax expense is based on

Accepted Answer

A)  profit from operations. 
B)  profit before income taxes. 
C)  retained earnings balance. 
D)  profit. 
A)  profit from operations. 
B)  profit before income taxes. 
C)  retained earnings balance. 
D)  profit.

Question 8

Retained earnings are the cumulative profits or losses since incorporation that have been retained within the corporation.

Accepted Answer

A) True 
 B)False

Question 9

Creditors have access to corporate assets only to have their claims repaid.

Accepted Answer

A) True 
 B)False

Question 10

If the board of directors has NOT declared a dividend then no liability exists.

Accepted Answer

A) True 
 B)False

Question 11

The statement of retained earnings

Accepted Answer

A)  reports the amount of dividends declared. 
B)  reports the amount of dividends paid. 
C)  reports the date dividends were declared. 
D)  does not report dividends. 
A)  reports the amount of dividends declared. 
B)  reports the amount of dividends paid. 
C)  reports the date dividends were declared. 
D)  does not report dividends.

Question 12

Which of the following statements about dividends is NOT accurate?

Accepted Answer

A)  Many companies declare and pay cash quarterly dividends. 
B)  Low dividends may mean high investment returns. 
C)  The board of directors is obligated to declare dividends. 
D)  A legal dividend may not be a feasible one. 
A)  Many companies declare and pay cash quarterly dividends. 
B)  Low dividends may mean high investment returns. 
C)  The board of directors is obligated to declare dividends. 
D)  A legal dividend may not be a feasible one.

Question 13

A corporation must have preferred shares.

Accepted Answer

A) True 
 B)False

Question 14

Most of the largest Canadian companies are publically held.

Accepted Answer

A) True 
 B)False

Question 15

Share capital may be distributed to shareholders as dividends.

Accepted Answer

A) True 
 B)False

Question 16

Shares can be issued only in exchange for cash.

Accepted Answer

A) True 
 B)False

Question 17

Corporate income tax is based on the amount of retained earnings that a company has.

Accepted Answer

A) True 
 B)False

Question 18

Nicco Corporation had the following accounts at January 1, 2021:   The company has profit of $ 79,000 in 2021 and paid $ 85,000 in dividends.
Instructions 
a) Calculate the return on equity at December 31, 2021.
b) What does this ratio tell you about the corporation?

Accepted Answer

a) Beginning balance in shareholders' eq

Question 19

Income tax expense is added to income when determining profit.

Accepted Answer

A) True 
 B)False

Question 20

Corporation income tax expense is

Accepted Answer

A)  usually accrued in the adjusting entry process. 
B)  not usually accrued because it is not known what the exact liability will be until the tax return is filed. 
C)  not reported in a separate section of a corporate income statement. 
D)  calculated using profit before income taxes in the previous fiscal year. 
A)  usually accrued in the adjusting entry process. 
B)  not usually accrued because it is not known what the exact liability will be until the tax return is filed. 
C)  not reported in a separate section of a corporate income statement. 
D)  calculated using profit before income taxes in the previous fiscal year.

The advantage of debiting a Cash Dividend account, instead of Retained Earnings, is that

A cumulative dividend feature will mean that unpaid dividends from prior periods will be paid before the current dividend entitlement.

Dividends in arrears

The ownership of the shares is determined on the date of declaration.

Income tax expense is based on

Retained earnings are the cumulative profits or losses since incorporation that have been retained within the corporation.

Creditors have access to corporate assets only to have their claims repaid.

If the board of directors has NOT declared a dividend then no liability exists.

The statement of retained earnings

Which of the following statements about dividends is NOT accurate?

A corporation must have preferred shares.

Most of the largest Canadian companies are publically held.

Share capital may be distributed to shareholders as dividends.

Shares can be issued only in exchange for cash.

Corporate income tax is based on the amount of retained earnings that a company has.

Nicco Corporation had the following accounts at January 1, 2021: The company has profit of $ 79,000 in 2021 and paid $ 85,000 in dividends. Instructions a) Calculate the return on equity at December 31, 2021. b) What does this ratio tell you about the corporation?

Income tax expense is added to income when determining profit.

Corporation income tax expense is

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

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Exam 5: Introduction to Corporations

The advantage of debiting a Cash Dividend account, instead of Retained Earnings, is that

A cumulative dividend feature will mean that unpaid dividends from prior periods will be paid before the current dividend entitlement.

Dividends in arrears

The ownership of the shares is determined on the date of declaration.

Income tax expense is based on

Retained earnings are the cumulative profits or losses since incorporation that have been retained within the corporation.

Creditors have access to corporate assets only to have their claims repaid.

If the board of directors has NOT declared a dividend then no liability exists.

The statement of retained earnings

Which of the following statements about dividends is NOT accurate?

A corporation must have preferred shares.

Most of the largest Canadian companies are publically held.

Share capital may be distributed to shareholders as dividends.

Shares can be issued only in exchange for cash.

Corporate income tax is based on the amount of retained earnings that a company has.

Nicco Corporation had the following accounts at January 1, 2021: The company has profit of $ 79,000 in 2021 and paid $ 85,000 in dividends. Instructions a) Calculate the return on equity at December 31, 2021. b) What does this ratio tell you about the corporation?

Income tax expense is added to income when determining profit.

Corporation income tax expense is

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