Question 1

The net effects on the corporation of the declaration and payment of a cash dividend are to

Accepted Answer

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

Question 2

Which of the following phrases is not descriptive of the corporate form of business?

Accepted Answer

A)  Professional management. 
B)  Double taxation on distributed earnings. 
C)  Unlimited liability. 
D)  Continuous existence. 
A)  Professional management. 
B)  Double taxation on distributed earnings. 
C)  Unlimited liability. 
D)  Continuous existence.

Question 3

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative,   Racer declared and paid a $100,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $24,000, Racer's common stockholders received

Accepted Answer

A)  $76,000. 
B)  $36,000. 
C)  $44,000. 
D)  no dividend. 
A)  $76,000. 
B)  $36,000. 
C)  $44,000. 
D)  no dividend.

Question 4

Hutchinson Company had retained earnings of $15,000 on the balance sheet but disclosed in the footnotes that $2,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments. Cash of $2,000 had been set aside for the plant expansion. How much of retained earnings is available for dividends?

Accepted Answer

A)  $12,000. 
B)  $13,000. 
C)  $15,000. 
D)  $10,000. 
A)  $12,000. 
B)  $13,000. 
C)  $15,000. 
D)  $10,000.

Question 5

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative,   Racer's total stockholders' equity was

Accepted Answer

A)  $73,520,000. 
B)  $62,480,000. 
C)  $72,680,000. 
D)  $71,840,000. 
A)  $73,520,000. 
B)  $62,480,000. 
C)  $72,680,000. 
D)  $71,840,000.

Question 6

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

Accepted Answer

A)  general and limited. 
B)  profit and not-for-profit. 
C)  state and federal. 
D)  publicly held and privately held. 
A)  general and limited. 
B)  profit and not-for-profit. 
C)  state and federal. 
D)  publicly held and privately held.

Question 7

Treasury stock should not be classified as a current asset.

Accepted Answer

A) True 
 B)False

Question 8

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative,   Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

Accepted Answer

A)  $57,000. 
B)  $27,000. 
C)  $33,000. 
D)  no dividend. 
A)  $57,000. 
B)  $27,000. 
C)  $33,000. 
D)  no dividend.

Question 9

Dividends in arrears are dividends on

Accepted Answer

A)  cumulative preferred stock that have been declared but have not been paid. 
B)  non-cumulative preferred stock that have not been declared for a given period of time. 
C)  cumulative preferred stock that have not been declared for a given period of time. 
D)  common dividends that have been declared but have not yet been paid. 
A)  cumulative preferred stock that have been declared but have not been paid. 
B)  non-cumulative preferred stock that have not been declared for a given period of time. 
C)  cumulative preferred stock that have not been declared for a given period of time. 
D)  common dividends that have been declared but have not yet been paid.

Question 10

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

Accepted Answer

A)  $60 per share. 
B)  $6,000 in total. 
C)  $600 in total. 
D)  $0.60 per share. 
A)  $60 per share. 
B)  $6,000 in total. 
C)  $600 in total. 
D)  $0.60 per share.

Question 11

Two classifications appearing in the paid-in capital section of the balance sheet are

Accepted Answer

A)  preferred stock and common stock. 
B)  paid-in capital and retained earnings. 
C)  capital stock and additional paid-in capital. 
D)  capital stock and treasury stock. 
A)  preferred stock and common stock. 
B)  paid-in capital and retained earnings. 
C)  capital stock and additional paid-in capital. 
D)  capital stock and treasury stock.

Question 12

A stock dividend does not affect the total amount of stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 13

The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a

Accepted Answer

A)  debit to Dividends Payable. 
B)  debit to Cash Dividends. 
C)  credit to Cash. 
D)  credit to Cash Dividends. 
A)  debit to Dividends Payable. 
B)  debit to Cash Dividends. 
C)  credit to Cash. 
D)  credit to Cash Dividends.

Question 14

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

Accepted Answer

A)  legal capital is $2,780,000. 
B)  number of shares issued is 80,000. 
C)  number of shares outstanding is 2,780,000. 
D)  average price per share issued is $3.48. 
A)  legal capital is $2,780,000. 
B)  number of shares issued is 80,000. 
C)  number of shares outstanding is 2,780,000. 
D)  average price per share issued is $3.48.

Question 15

The stockholders' equity section of Patrick Corporation's balance sheet at December 31 is presented here:   Instructions
From a review of the stockholders' equity section, answer the following questions.
(a) How many shares of common stock are outstanding?
(b) Assuming there is a stated value, what is the stated value of the common stock?
(c) What is the par value of the preferred stock?
(d) If the annual dividend on preferred stock is $30,000, what is the dividend rate on preferred stock?
(e) If dividends of $60,000 were in arrears on preferred stock, what would be the balance reported for retained earnings?

Accepted Answer

(a) Common stock outstanding is 596,000

Question 16

A disadvantage of the corporate form of organization is

Accepted Answer

A)  professional management. 
B)  tax treatment. 
C)  ease of transfer of ownership. 
D)  lack of mutual agency. 
A)  professional management. 
B)  tax treatment. 
C)  ease of transfer of ownership. 
D)  lack of mutual agency.

Question 17

The amount of stock that may be issued according to the corporation's charter is referred to as the

Accepted Answer

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

Question 18

What is the total stockholders' equity based on the following account balances?

Accepted Answer

A)  $1,400,000. 
B)  $1,820,000. 
C)  $1,760,000. 
D)  $1,700,000. 
A)  $1,400,000. 
B)  $1,820,000. 
C)  $1,760,000. 
D)  $1,700,000.

Question 19

Dividends may be declared and paid in cash or stock.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following show the proper effect of a stock split and a stock dividend?

Accepted Answer

The answer of Which of the following show the proper...

The net effects on the corporation of the declaration and payment of a cash dividend are to

Which of the following phrases is not descriptive of the corporate form of business?

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer declared and paid a $100,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $24,000, Racer's common stockholders received

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer's total stockholders' equity was

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

Treasury stock should not be classified as a current asset.

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

Dividends in arrears are dividends on

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

Two classifications appearing in the paid-in capital section of the balance sheet are

A stock dividend does not affect the total amount of stockholders' equity.

The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

A disadvantage of the corporate form of organization is

The amount of stock that may be issued according to the corporation's charter is referred to as the

What is the total stockholders' equity based on the following account balances?

Dividends may be declared and paid in cash or stock.

Which of the following show the proper effect of a stock split and a stock dividend?

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 net effects on the corporation of the declaration and payment of a cash dividend are to

Which of the following phrases is not descriptive of the corporate form of business?

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer declared and paid a $100,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $24,000, Racer's common stockholders received

Racer Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Racer's total stockholders' equity was

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

Treasury stock should not be classified as a current asset.

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Nance declared and paid a $75,000 cash dividend on December 15, 2014. If the company's dividends in arrears prior to that date were $18,000, Nance's common stockholders received

Dividends in arrears are dividends on

CAB Inc. has 1,000 shares of 6%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2014. What is the annual dividend on the preferred stock?

Two classifications appearing in the paid-in capital section of the balance sheet are

A stock dividend does not affect the total amount of stockholders' equity.

The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a

A corporation has the following account balances: Common Stock, $1 par value, $80,000; Paid-in Capital in Excess of Par Value, $2,700,000. Based on this information, the

A disadvantage of the corporate form of organization is

The amount of stock that may be issued according to the corporation's charter is referred to as the

What is the total stockholders' equity based on the following account balances?

Dividends may be declared and paid in cash or stock.

Which of the following show the proper effect of a stock split and a stock dividend?

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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