Question 1

All of the following are normally found in a corporation's stockholders' equity section except

Accepted Answer

A)  dividends in arrears. 
B)  common stock. 
C)  paid-in capital. 
D)  retained earnings. 
A)  dividends in arrears. 
B)  common stock. 
C)  paid-in capital. 
D)  retained earnings.

Question 2

Which one of the following is not an ownership right of a stockholder in a corporation?

Accepted Answer

A)  To vote in the election of directors. 
B)  To declare dividends on the common stock. 
C)  To share in assets upon liquidation. 
D)  To share in corporate earnings. 
A)  To vote in the election of directors. 
B)  To declare dividends on the common stock. 
C)  To share in assets upon liquidation. 
D)  To share in corporate earnings.

Question 3

When stock is issued in exchange for a noncash asset, the value recorded for the shares issued is best determined by

Accepted Answer

A)  the book value of the noncash asset. 
B)  the market value of the shares. 
C)  the par value of the shares. 
D)  the contributed capital of the shares. 
A)  the book value of the noncash asset. 
B)  the market value of the shares. 
C)  the par value of the shares. 
D)  the contributed capital of the shares.

Question 4

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

Accepted Answer

A)  The dividend can be rescinded once it has been declared.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 increased. 
A)  The dividend can be rescinded once it has been declared.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 increased.

Question 5

On January 1, Edmiston Corporation had 1,600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Accepted Answer

A)  Edmiston's Paid-in Capital in Excess of Par Value account increased $800,000. 
B)  Edmiston's total stockholders' equity was unaffected. 
C)  Edmiston's Stock Dividends account increased $2,400,000. 
D)  All of these answer choices are correct. 
A)  Edmiston's Paid-in Capital in Excess of Par Value account increased $800,000. 
B)  Edmiston's total stockholders' equity was unaffected. 
C)  Edmiston's Stock Dividends account increased $2,400,000. 
D)  All of these answer choices are correct.

Question 6

Which of the following would not affect the balance of the Retained Earnings account?

Accepted Answer

A)  Net income. 
B)  Stock dividend. 
C)  Stock split. 
D)  Gains and losses of a company. 
A)  Net income. 
B)  Stock dividend. 
C)  Stock split. 
D)  Gains and losses of a company.

Question 7

The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Marvel Corporation at December 31, 2014.   Instructions
Prepare the stockholders' equity section of the balance sheet at December 31, 2014.

Accepted Answer

MARVEL CORPORATION
P

Question 8

The following selected amounts are available for Thomas Company.   What is its ending Retained Earnings balance?

Accepted Answer

A)  $2,200. 
B)  $2,300. 
C)  $1,900. 
D)  $2,100. 
A)  $2,200. 
B)  $2,300. 
C)  $1,900. 
D)  $2,100.

Question 9

An inexperienced accountant for Teahan Corporation made the following entries.   Instructions
On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions. (Omit explanations.)

Accepted Answer

The answer of An inexperienced accountant for Teahan Corporation made...

Question 10

The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures.   What is the payout ratio for Benedict?

Accepted Answer

A)  40% 
B)  24% 
C)  16% 
D)  6% 
A)  40% 
B)  24% 
C)  16% 
D)  6%

Question 11

The following items were shown on the balance sheet of Martin Corporation on December 31, 2014:   Instructions
Complete the following statements and show your computations.

Accepted Answer

The answer of The following items were shown on the...

Question 12

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative,   Nance's total paid-in capital was

Accepted Answer

A)  $46,860,000. 
B)  $47,490,000. 
C)  $46,230,000. 
D)  $27,060,000. 
A)  $46,860,000. 
B)  $47,490,000. 
C)  $46,230,000. 
D)  $27,060,000.

Question 13

Net income of a corporation should be closed to retained earnings and net losses should be closed to paid-in capital accounts.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements about dividends is not accurate?

Accepted Answer

A)  Dividends are generally reported quarterly as a dollar amount per share. 
B)  Low dividends may mean high stock returns. 
C)  The board of directors is obligated to declare dividends. 
D)  Payment of dividends from legal capital is illegal in many states. 
A)  Dividends are generally reported quarterly as a dollar amount per share. 
B)  Low dividends may mean high stock returns. 
C)  The board of directors is obligated to declare dividends. 
D)  Payment of dividends from legal capital is illegal in many states.

Question 15

The officer that is generally responsible for maintaining the cash position of the corporation is the

Accepted Answer

A)  controller. 
B)  treasurer. 
C)  cashier. 
D)  internal auditor. 
A)  controller. 
B)  treasurer. 
C)  cashier. 
D)  internal auditor.

Question 16

On January 1, 2014, Holt Corporation had $1,000,000 of common stock outstanding that was issued at par and retained earnings of $750,000. The company issued 60,000 shares of common stock at par on July 1 and earned net income of $400,000 for the year.
Instructions
Journalize the declaration of a 15% stock dividend on December 10, 2014, for the following two independent assumptions.
(a) Par value is $10 and market value is $16.
(b) Par value is $5 and market value is $8.

Accepted Answer

The answer of On January 1, 2014, Holt Corporation had...

Question 17

If common stock is issued for an amount greater than par value, the excess should be credited to

Accepted Answer

A)  Cash. 
B)  Retained Earnings. 
C)  Paid-in Capital in Excess of Par Value. 
D)  Legal Capital. 
A)  Cash. 
B)  Retained Earnings. 
C)  Paid-in Capital in Excess of Par Value. 
D)  Legal Capital.

Question 18

The par value of a stock

Accepted Answer

A)  is legally significant. 
B)  reflects the most recent market price. 
C)  is selected by the SEC. 
D)  is indicative of the worth of the stock. 
A)  is legally significant. 
B)  reflects the most recent market price. 
C)  is selected by the SEC. 
D)  is indicative of the worth of the stock.

Question 19

If an investment firm underwrites a stock issue, the

Accepted Answer

A)  risk of being unable to sell the shares stays with the issuing corporation. 
B)  corporation obtains cash immediately from the investment firm. 
C)  investment firm has guaranteed profits on the sale of the stock. 
D)  issuance of stock is likely to be directly to creditors. 
A)  risk of being unable to sell the shares stays with the issuing corporation. 
B)  corporation obtains cash immediately from the investment firm. 
C)  investment firm has guaranteed profits on the sale of the stock. 
D)  issuance of stock is likely to be directly to creditors.

Question 20

A debit balance in the Retained Earnings account is identified as a deficit.

Accepted Answer

A) True 
 B)False

All of the following are normally found in a corporation's stockholders' equity section except

Which one of the following is not an ownership right of a stockholder in a corporation?

When stock is issued in exchange for a noncash asset, the value recorded for the shares issued is best determined by

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

On January 1, Edmiston Corporation had 1,600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Which of the following would not affect the balance of the Retained Earnings account?

The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Marvel Corporation at December 31, 2014. Instructions Prepare the stockholders' equity section of the balance sheet at December 31, 2014.

The following selected amounts are available for Thomas Company. What is its ending Retained Earnings balance?

An inexperienced accountant for Teahan Corporation made the following entries. Instructions On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions. (Omit explanations.)

The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures. What is the payout ratio for Benedict?

The following items were shown on the balance sheet of Martin Corporation on December 31, 2014: Instructions Complete the following statements and show your computations.

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Nance's total paid-in capital was

Net income of a corporation should be closed to retained earnings and net losses should be closed to paid-in capital accounts.

Which of the following statements about dividends is not accurate?

The officer that is generally responsible for maintaining the cash position of the corporation is the

If common stock is issued for an amount greater than par value, the excess should be credited to

The par value of a stock

If an investment firm underwrites a stock issue, the

A debit balance in the Retained Earnings account is identified as a deficit.

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

All of the following are normally found in a corporation's stockholders' equity section except

Which one of the following is not an ownership right of a stockholder in a corporation?

When stock is issued in exchange for a noncash asset, the value recorded for the shares issued is best determined by

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

On January 1, Edmiston Corporation had 1,600,000 shares of $10 par value common stock outstanding. On March 31 the company declared a 10% stock dividend. Market value of the stock was $15/share. As a result of this event,

Which of the following would not affect the balance of the Retained Earnings account?

The following stockholders' equity accounts, arranged alphabetically, are in the ledger of Marvel Corporation at December 31, 2014. Instructions Prepare the stockholders' equity section of the balance sheet at December 31, 2014.

The following selected amounts are available for Thomas Company. What is its ending Retained Earnings balance?

An inexperienced accountant for Teahan Corporation made the following entries. Instructions On the basis of the explanation for each entry, prepare the entry that should have been made for the transactions. (Omit explanations.)

The following information pertains to Benedict Company. Assume that all balance sheet amounts represent average balance figures. What is the payout ratio for Benedict?

The following items were shown on the balance sheet of Martin Corporation on December 31, 2014: Instructions Complete the following statements and show your computations.

Nance Corporation's December 31, 2014 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, Nance's total paid-in capital was

Net income of a corporation should be closed to retained earnings and net losses should be closed to paid-in capital accounts.

Which of the following statements about dividends is not accurate?

The officer that is generally responsible for maintaining the cash position of the corporation is the

If common stock is issued for an amount greater than par value, the excess should be credited to

The par value of a stock

If an investment firm underwrites a stock issue, the

A debit balance in the Retained Earnings account is identified as a deficit.

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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