Question 1

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 2

The main purpose of a stock split is to

Accepted Answer

A)  decrease the marketability of the stock by increasing the price. 
B)  increase the marketability of the stock by increasing the price. 
C)  increase the marketability of the stock by decreasing the price. 
D)  reduce the number of issued shares. 
A)  decrease the marketability of the stock by increasing the price. 
B)  increase the marketability of the stock by increasing the price. 
C)  increase the marketability of the stock by decreasing the price. 
D)  reduce the number of issued shares.

Question 3

Use the following information for questions.
Fair Corporation issues 7,500 preferred shares for $25 per share.
-The entry to record the transaction will consist of a debit to Cash for $187,500 and a credit or credits to

Accepted Answer

A)  Preferred Shares for $187,500. 
B)  Preferred Shares for $100,000 and Share Capital for $87,500. 
C)  Preferred Shares for $100,000 and Retained Earnings for $87,500. 
D)  Investment in Preferred Shares for $187,500. 
A)  Preferred Shares for $187,500. 
B)  Preferred Shares for $100,000 and Share Capital for $87,500. 
C)  Preferred Shares for $100,000 and Retained Earnings for $87,500. 
D)  Investment in Preferred Shares for $187,500.

Question 4

The board of directors must assign a per share value to a stock dividend declared that is equal to the

Accepted Answer

A)  average cost. 
B)  zero. 
C)  original issue price. 
D)  fair value. 
A)  average cost. 
B)  zero. 
C)  original issue price. 
D)  fair value.

Question 5

Which of the following usually represents the largest number of common shares?

Accepted Answer

A)  restricted shares. 
B)  issued shares. 
C)  treasury shares. 
D)  authorized shares. 
A)  restricted shares. 
B)  issued shares. 
C)  treasury shares. 
D)  authorized shares.

Question 6

Which of the following statements is considered an advantage of the corporate form of organization?

Accepted Answer

A)  additional income tax 
B)  government regulations 
C)  limited liability of shareholders 
D)  increased disclosure requirements 
A)  additional income tax 
B)  government regulations 
C)  limited liability of shareholders 
D)  increased disclosure requirements

Question 7

The declaration and distribution of a stock dividend will

Accepted Answer

A)  increase total shareholders' equity. 
B)  increase total assets. 
C)  decrease total assets. 
D)  have no effect on total assets. 
A)  increase total shareholders' equity. 
B)  increase total assets. 
C)  decrease total assets. 
D)  have no effect on total assets.

Question 8

An initial public offering occurs the first time a corporation sells shares to the public.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following factors does not affect the initial market price of a share?

Accepted Answer

A)  the company's anticipated future net income 
B)  the legal value of the share 
C)  the current state of the economy 
D)  the expected dividend rate per share 
A)  the company's anticipated future net income 
B)  the legal value of the share 
C)  the current state of the economy 
D)  the expected dividend rate per share

Question 10

Maha Corporation has 2,000,000 authorized common shares. As of June 30, 2018, there were 350,000 shares issued. On this date, the board of directors declared a $0.25 per share cash dividend to be paid on August 1, 2018 to shareholders of record on July 7, 2018.InstructionsPrepare the necessary journal entries to be recorded on
a. the date of declaration,
b. the date of record, and
c. the date of payment. If no entry is needed write "No entry required."

Accepted Answer

The answer of Maha Corporation has 2,000,000 authorized common shares....

Question 11

As of December 31, 2018, Shaka Son Inc. had the following share capital:1. 750,000 common shares authorized, 350,000 of which had been issued for a total of $5,250,000.2. 100,000 noncumulative, $10.50 preferred shares authorized, 10,000 of which had been issued at $200 per share.InstructionsPrepare the share capital section of the statement of financial position at December 31, 2018.

Accepted Answer

The answer of As of December 31, 2018, Shaka Son...

Question 12

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

Question 13

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 14

When stock dividends are distributed

Accepted Answer

A)  Stock Dividends Distributable is decreased. 
B)  Retained Earnings is decreased. 
C)  Common Shares is debited. 
D)  no entry is necessary. 
A)  Stock Dividends Distributable is decreased. 
B)  Retained Earnings is decreased. 
C)  Common Shares is debited. 
D)  no entry is necessary.

Question 15

A corporation acts under its' own name rather than in the name of its shareholders.

Accepted Answer

A) True 
 B)False

Question 16

Contributed capital is the amount shareholders paid or contributed to the corporation in exchange for shares of ownership.

Accepted Answer

A) True 
 B)False

Question 17

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Dividends in arrears are dividends on

Accepted Answer

A)  cumulative preferred shares that have been declared but have not been paid. 
B)  noncumulative preferred shares that have not been declared for a given period of time. 
C)  cumulative preferred shares that have not been declared for a given period of time. 
D)  common dividends that have been declared but have not been paid. 
A)  cumulative preferred shares that have been declared but have not been paid. 
B)  noncumulative preferred shares that have not been declared for a given period of time. 
C)  cumulative preferred shares that have not been declared for a given period of time. 
D)  common dividends that have been declared but have not been paid.

Question 20

If the statement of financial position is prepared after a stock dividend has been declared but before it has been distributed, the stock dividend distributable would be reported in the

Accepted Answer

A)  liabilities section. 
B)  contributed capital section of shareholders' equity. 
C)  assets section. 
D)  It would not be reported in the statement of financial position. 
A)  liabilities section. 
B)  contributed capital section of shareholders' equity. 
C)  assets section. 
D)  It would not be reported in the statement of financial position.

Legal capital

The main purpose of a stock split is to

Use the following information for questions. Fair Corporation issues 7,500 preferred shares for $25 per share. -The entry to record the transaction will consist of a debit to Cash for $187,500 and a credit or credits to

The board of directors must assign a per share value to a stock dividend declared that is equal to the

Which of the following usually represents the largest number of common shares?

Which of the following statements is considered an advantage of the corporate form of organization?

The declaration and distribution of a stock dividend will

An initial public offering occurs the first time a corporation sells shares to the public.

Which of the following factors does not affect the initial market price of a share?

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

Cash dividends are declared out of

When stock dividends are distributed

A corporation acts under its' own name rather than in the name of its shareholders.

Contributed capital is the amount shareholders paid or contributed to the corporation in exchange for shares of ownership.

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

Dividends in arrears on cumulative preferred shares

Dividends in arrears are dividends on

If the statement of financial position is prepared after a stock dividend has been declared but before it has been distributed, the stock dividend distributable would be reported in the

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

Legal capital

The main purpose of a stock split is to

Use the following information for questions. Fair Corporation issues 7,500 preferred shares for $25 per share. -The entry to record the transaction will consist of a debit to Cash for $187,500 and a credit or credits to

The board of directors must assign a per share value to a stock dividend declared that is equal to the

Which of the following usually represents the largest number of common shares?

Which of the following statements is considered an advantage of the corporate form of organization?

The declaration and distribution of a stock dividend will

An initial public offering occurs the first time a corporation sells shares to the public.

Which of the following factors does not affect the initial market price of a share?

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

Cash dividends are declared out of

When stock dividends are distributed

A corporation acts under its' own name rather than in the name of its shareholders.

Contributed capital is the amount shareholders paid or contributed to the corporation in exchange for shares of ownership.

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

Dividends in arrears on cumulative preferred shares

Dividends in arrears are dividends on

If the statement of financial position is prepared after a stock dividend has been declared but before it has been distributed, the stock dividend distributable would be reported in the

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