Question 1

A company can control the market value of its shares.

Accepted Answer

A) True 
 B)False

Question 2

Corporations generally issue stock dividends in order to

Accepted Answer

A)  increase the market price per share. 
B)  exceed shareholders' dividend expectations. 
C)  increase the marketability of the shares. 
D)  decrease the amount of capital in the corporation. 
A)  increase the market price per share. 
B)  exceed shareholders' dividend expectations. 
C)  increase the marketability of the shares. 
D)  decrease the amount of capital in the corporation.

Question 3

A stock split results in a transfer at market value from retained earnings to share capital.

Accepted Answer

A) True 
 B)False

Question 4

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%.

Question 5

Which of the following statements regarding the date of a cash dividend declaration is not true?

Accepted Answer

A)  The dividend can be cancelled once it has been declared. 
B)  The corporation is committed to a legal, binding obligation. 
C)  The board of directors formally authorizes the cash dividend. 
D)  A liability account must be created or increased. 
A)  The dividend can be cancelled once it has been declared. 
B)  The corporation is committed to a legal, binding obligation. 
C)  The board of directors formally authorizes the cash dividend. 
D)  A liability account must be created or increased.

Question 6

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 7

The net effect on the corporation's books of the declaration and payment of a cash dividend are to

Accepted Answer

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

Question 8

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 9

Mr. Gold sold 100 shares of Delia Corp. to Mrs. Silver for $2,200. As a result of this transaction, Delia Corp.'s

Accepted Answer

A)  shareholders' equity did not change. 
B)  shareholders' equity increased by $2,200. 
C)  shareholders' equity decreased by $2,200. 
D)  assets increased by $2,200. 
A)  shareholders' equity did not change. 
B)  shareholders' equity increased by $2,200. 
C)  shareholders' equity decreased by $2,200. 
D)  assets increased by $2,200.

Question 10

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 11

All of the following are advantages of the corporate form of organization except

Accepted Answer

A)  government regulation. 
B)  reduced income tax. 
C)  ease of transfer of ownership. 
D)  continuous life. 
A)  government regulation. 
B)  reduced income tax. 
C)  ease of transfer of ownership. 
D)  continuous life.

Question 12

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 13

The issue of common shares affects both share capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Those most responsible for the major policy decisions of a corporation are the

Accepted Answer

A)  shareholders. 
B)  board of directors. 
C)  management. 
D)  employees. 
A)  shareholders. 
B)  board of directors. 
C)  management. 
D)  employees.

Question 16

Baria Inc. is reacquiring 10,000 common shares. The price is $5.00/share and the average price is $5.10. Assuming that there is a contributed surplus balance of $5,000, which accounts will be affected by the transaction?

Accepted Answer

A)  Common shares, Contributed Surplus, Retained Earnings and Cash 
B)  Common shares, Contributed Surplus and Cash 
C)  Common shares, Retained Earnings and Cash 
D)  Common shares and Cash 
A)  Common shares, Contributed Surplus, Retained Earnings and Cash 
B)  Common shares, Contributed Surplus and Cash 
C)  Common shares, Retained Earnings and Cash 
D)  Common shares and Cash

Question 17

Identify (by letter) each of the following characteristics as being an advantage, a disadvantage, or not applicable to the corporate form of business organization.

Accepted Answer

The answer of Identify (by letter) each of the following...

Question 18

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 19

Use the following information for questions.
On July 15, 2018, 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, 2018, to shareholders of record on July 31, 2018.
-The effects of the journal entry to record the declaration of the dividend on July 15, 2018, 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 20

The payout ratio is calculated by dividing the cash dividends paid on common shares by retained earnings.

Accepted Answer

A) True 
 B)False

A company can control the market value of its shares.

Corporations generally issue stock dividends in order to

A stock split results in a transfer at market value from retained earnings to share capital.

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?

Which of the following statements regarding the date of a cash dividend declaration is not true?

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

The net effect on the corporation's books of the declaration and payment of a cash dividend are to

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

Mr. Gold sold 100 shares of Delia Corp. to Mrs. Silver for $2,200. As a result of this transaction, Delia Corp.'s

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

All of the following are advantages of the corporate form of organization except

A corporate board of directors does not generally

The issue of common shares affects both share capital and retained earnings.

A corporation records a dividend-related liability

Those most responsible for the major policy decisions of a corporation are the

Baria Inc. is reacquiring 10,000 common shares. The price is $5.00/share and the average price is $5.10. Assuming that there is a contributed surplus balance of $5,000, which accounts will be affected by the transaction?

Identify (by letter) each of the following characteristics as being an advantage, a disadvantage, or not applicable to the corporate form of business organization.

Stock Dividends Distributable is classified as a(n)

The payout ratio is calculated by dividing the cash dividends paid on common shares by retained earnings.

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

A company can control the market value of its shares.

Corporations generally issue stock dividends in order to

A stock split results in a transfer at market value from retained earnings to share capital.

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?

Which of the following statements regarding the date of a cash dividend declaration is not true?

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

The net effect on the corporation's books of the declaration and payment of a cash dividend are to

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

Mr. Gold sold 100 shares of Delia Corp. to Mrs. Silver for $2,200. As a result of this transaction, Delia Corp.'s

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

All of the following are advantages of the corporate form of organization except

A corporate board of directors does not generally

The issue of common shares affects both share capital and retained earnings.

A corporation records a dividend-related liability

Those most responsible for the major policy decisions of a corporation are the

Baria Inc. is reacquiring 10,000 common shares. The price is $5.00/share and the average price is $5.10. Assuming that there is a contributed surplus balance of $5,000, which accounts will be affected by the transaction?

Identify (by letter) each of the following characteristics as being an advantage, a disadvantage, or not applicable to the corporate form of business organization.

Stock Dividends Distributable is classified as a(n)

The payout ratio is calculated by dividing the cash dividends paid on common shares by retained earnings.

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