Question 1

The declaration of a small stock dividend will

Accepted Answer

A)  increase paid-in capital. 
B)  change the total of stockholders' equity. 
C)  increase total liabilities. 
D)  increase total assets. 
A)  increase paid-in capital. 
B)  change the total of stockholders' equity. 
C)  increase total liabilities. 
D)  increase total assets.

Question 2

In the stockholders' equity section of the balance sheet

Accepted Answer

A)  Common Stock Dividends Distributable will be classified as part of additional paid-in capital. 
B)  Common Stock Dividends Distributable will appear in its own subsection of the stockholders' equity. 
C)  Additional Paid-in Capital appears under the sub-section paid-in capital. 
D)  Dividends in Arrears will appear as a restriction of retained earnings. 
A)  Common Stock Dividends Distributable will be classified as part of additional paid-in capital. 
B)  Common Stock Dividends Distributable will appear in its own subsection of the stockholders' equity. 
C)  Additional Paid-in Capital appears under the sub-section paid-in capital. 
D)  Dividends in Arrears will appear as a restriction of retained earnings.

Question 3

Which of the following would not be true of a privately held corporation?

Accepted Answer

A)  It is sometimes called a closely held corporation. 
B)  Its shares are regularly traded on the New York Stock Exchange. 
C)  It does not offer its shares for sale to the general public. 
D)  It is usually smaller than a publicly held company. 
A)  It is sometimes called a closely held corporation. 
B)  Its shares are regularly traded on the New York Stock Exchange. 
C)  It does not offer its shares for sale to the general public. 
D)  It is usually smaller than a publicly held company.

Question 4

On January 1, Hamblin Corporation had 90,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a

Accepted Answer

A)  credit to Stock Dividends for $27,000. 
B)  credit to Cash for $117,000. 
C)  credit to Common Stock Dividends Distributable for $90,000. 
D)  debit to Common Stock Dividends Distributable for $90,000. 
A)  credit to Stock Dividends for $27,000. 
B)  credit to Cash for $117,000. 
C)  credit to Common Stock Dividends Distributable for $90,000. 
D)  debit to Common Stock Dividends Distributable for $90,000.

Question 5

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

Accepted Answer

A)  Leary's Common Stock account decreased $50,000. 
B)  Leary's total stockholders' equity decreased $115,000. 
C)  Leary's Paid-in Capital in Excess of Par Value account decreased $65,000. 
D)  All of these answer choices are correct. 
A)  Leary's Common Stock account decreased $50,000. 
B)  Leary's total stockholders' equity decreased $115,000. 
C)  Leary's Paid-in Capital in Excess of Par Value account decreased $65,000. 
D)  All of these answer choices are correct.

Question 6

When retained earnings are restricted, total retained earnings

Accepted Answer

A)  are unaffected. 
B)  increase. 
C)  decrease. 
D)  may increase or decrease. 
A)  are unaffected. 
B)  increase. 
C)  decrease. 
D)  may increase or decrease.

Question 7

The board of directors of Bosco Company declared a cash dividend on November 15, 2014, to be paid on December 15, 2014, to stockholders owning the stock on November 30, 2014. Given these facts, the date of November 30, 2014, is referred to as the

Accepted Answer

A)  declaration date. 
B)  record date. 
C)  payment date. 
D)  ex-dividend date. 
A)  declaration date. 
B)  record date. 
C)  payment date. 
D)  ex-dividend date.

Question 8

Treasury stock should be reported in the financial statements of a corporation as a(n)

Accepted Answer

A)  investment. 
B)  liability. 
C)  deduction from total paid-in capital. 
D)  deduction from total paid-in capital and retained earnings. 
A)  investment. 
B)  liability. 
C)  deduction from total paid-in capital. 
D)  deduction from total paid-in capital and retained earnings.

Question 9

Preferred stockholders generally do not have the right to vote for the board of directors.

Accepted Answer

A) True 
 B)False

Question 10

A stockholder who receives a stock dividend would

Accepted Answer

A)  expect the market price per share to increase. 
B)  own more shares of stock. 
C)  expect retained earnings to increase. 
D)  expect the par value of the stock to change. 
A)  expect the market price per share to increase. 
B)  own more shares of stock. 
C)  expect retained earnings to increase. 
D)  expect the par value of the stock to change.

Question 11

Retained earnings that are restricted are unavailable for dividends.

Accepted Answer

A) True 
 B)False

Question 12

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Accepted Answer

A) True 
 B)False

Question 13

Manner, Inc. has 10,000 shares of 5%, ₤100 par value, noncumulative preference shares and 20,000 ordinary shares with a ₤1 par value outstanding at December 31, 2014. There were no dividends declared in 2013. The board of directors declares and pays a ₤90,000 dividend in 2014. What is the amount of dividends received by the ordinary share holders in 2014?

Accepted Answer

A)  ₤0 
B)  ₤50,000 
C)  ₤90,000 
D)  ₤40,000 
A)  ₤0 
B)  ₤50,000 
C)  ₤90,000 
D)  ₤40,000

Question 14

Which one of the following events would not require a journal entry on a corporation's books?

Accepted Answer

A)  2-for-1 stock split. 
B)  100% stock dividend. 
C)  2% stock dividend. 
D)  $1 per share cash dividend. 
A)  2-for-1 stock split. 
B)  100% stock dividend. 
C)  2% stock dividend. 
D)  $1 per share cash dividend.

Question 15

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

Accepted Answer

A)  Treasury shares. 
B)  Issued shares. 
C)  Outstanding shares. 
D)  Authorized shares. 
A)  Treasury shares. 
B)  Issued shares. 
C)  Outstanding shares. 
D)  Authorized shares.

Question 16

Ferman Corporation had net income of $160,000 and paid dividends of $50,000 to common stockholders and $20,000 to preferred stockholders in 2014. Ferman Corporation's common stockholders' equity at the beginning and end of 2014 was $870,000 and $1,130,000, respectively. Ferman Corporation's payout ratio for 2014 was

Accepted Answer

A)  5.0%. 
B)  43.8%. 
C)  31.3%. 
D)  12.5%. 
A)  5.0%. 
B)  43.8%. 
C)  31.3%. 
D)  12.5%.

Question 17

Treasury shares plus outstanding shares equal

Accepted Answer

A)  authorized stock. 
B)  issued stock. 
C)  unissued stock. 
D)  distributable stock. 
A)  authorized stock. 
B)  issued stock. 
C)  unissued stock. 
D)  distributable stock.

Question 18

The following data is available for BOX Corporation at December 31, 2014:   Based on the data, how many shares of common stock are outstanding?

Accepted Answer

A)  30,000. 
B)  25,000. 
C)  29,920. 
D)  24,920. 
A)  30,000. 
B)  25,000. 
C)  29,920. 
D)  24,920.

Question 19

Ritchey Corporation has the following capital stock outstanding at December 31, 2014:   The preferred stock was issued at $125 per share. The common stock was issued at an average per share price of $14.
Instructions
Prepare the paid-in capital section of the balance sheet at December 31, 2014.

Accepted Answer

Stockholders' equity

Question 20

Placing a restriction on retained earnings will

Accepted Answer

A)  assure that a company has sufficient cash for a specific purpose. 
B)  increase total stockholders' equity. 
C)  communicate to readers a portion of retained earnings is unavailable for dividends. 
D)  decrease total stockholders' equity. 
A)  assure that a company has sufficient cash for a specific purpose. 
B)  increase total stockholders' equity. 
C)  communicate to readers a portion of retained earnings is unavailable for dividends. 
D)  decrease total stockholders' equity.

The declaration of a small stock dividend will

In the stockholders' equity section of the balance sheet

Which of the following would not be true of a privately held corporation?

On January 1, Hamblin Corporation had 90,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

When retained earnings are restricted, total retained earnings

The board of directors of Bosco Company declared a cash dividend on November 15, 2014, to be paid on December 15, 2014, to stockholders owning the stock on November 30, 2014. Given these facts, the date of November 30, 2014, is referred to as the

Treasury stock should be reported in the financial statements of a corporation as a(n)

Preferred stockholders generally do not have the right to vote for the board of directors.

A stockholder who receives a stock dividend would

Retained earnings that are restricted are unavailable for dividends.

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Which one of the following events would not require a journal entry on a corporation's books?

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

Treasury shares plus outstanding shares equal

The following data is available for BOX Corporation at December 31, 2014: Based on the data, how many shares of common stock are outstanding?

Ritchey Corporation has the following capital stock outstanding at December 31, 2014: The preferred stock was issued at $125 per share. The common stock was issued at an average per share price of $14. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2014.

Placing a restriction on retained earnings will

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Time Value of Money

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Exam 11: Reporting and Analyzing Stockholders Equity

The declaration of a small stock dividend will

In the stockholders' equity section of the balance sheet

Which of the following would not be true of a privately held corporation?

On January 1, Hamblin Corporation had 90,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event,

When retained earnings are restricted, total retained earnings

The board of directors of Bosco Company declared a cash dividend on November 15, 2014, to be paid on December 15, 2014, to stockholders owning the stock on November 30, 2014. Given these facts, the date of November 30, 2014, is referred to as the

Treasury stock should be reported in the financial statements of a corporation as a(n)

Preferred stockholders generally do not have the right to vote for the board of directors.

A stockholder who receives a stock dividend would

Retained earnings that are restricted are unavailable for dividends.

A stock dividend will cause an increase in total contributed capital at the date the dividend is declared.

Which one of the following events would not require a journal entry on a corporation's books?

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

Treasury shares plus outstanding shares equal

The following data is available for BOX Corporation at December 31, 2014: Based on the data, how many shares of common stock are outstanding?

Ritchey Corporation has the following capital stock outstanding at December 31, 2014: The preferred stock was issued at $125 per share. The common stock was issued at an average per share price of $14. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2014.

Placing a restriction on retained earnings will

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Statement of Cash Flows

Financial Analysis: The Big Picture

Time Value of Money

Filters