Question 1

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 2

Treasury Shares are a(n)

Accepted Answer

A) contra asset account. 
B) retained earnings account. 
C) asset account. 
D) contra equity account. 
A) contra asset account. 
B) retained earnings account. 
C) asset account. 
D) contra equity account.

Question 3

The cost of a noncash asset acquired in exchange for ordinary shares should be either the fair value of the consideration given up, or the fair value of the consideration received, whichever is more clearly determinable.

Accepted Answer

A) True 
 B)False

Question 4

A typical organization chart showing delegation of authority would show

Accepted Answer

A) shareholders delegating to the board of directors. 
B) the board of directors delegating to shareholders. 
C) the chief executive officer delegating to the board of directors. 
D) the controller delegating to the chief executive officer. 
A) shareholders delegating to the board of directors. 
B) the board of directors delegating to shareholders. 
C) the chief executive officer delegating to the board of directors. 
D) the controller delegating to the chief executive officer.

Question 5

Restricted retained earnings are available for preference share dividends but unavailable for ordinary share dividends.

Accepted Answer

A) True 
 B)False

Question 6

If a corporation has only one class of shares, it is referred to as

Accepted Answer

A) classless shares. 
B) preference shares. 
C) solitary shares. 
D) ordinary shares. 
A) classless shares. 
B) preference shares. 
C) solitary shares. 
D) ordinary shares.

Question 7

Luther Inc has 2,000 shares of 6%, $50 par value, cumulative preference shares and 100,000 ordinary shares with a $1 par value outstanding at December 31, 2011, and December 31, 2010.The board of directors declared and paid a $5,000 dividend in 2010.In 2011, $24,000 of dividends are declared and paid.What are the dividends received by the preference shareholders in 2011?

Accepted Answer

A) $17,000 
B) $12,000 
C) $7,000 
D) $6,000 
A) $17,000 
B) $12,000 
C) $7,000 
D) $6,000

Question 8

Jahnke Corporation issued 5,000 shares of €2 par value ordinary shares for €11 per share.The journal entry to record the sale will include

Accepted Answer

A) a debit to Cash for €10,000. 
B) a credit to Share Premium-Ordinary for €45,000. 
C) a credit to Share Capital-Ordinary for €55,000. 
D) a debit to Retained Earnings for €22,000. 
A) a debit to Cash for €10,000. 
B) a credit to Share Premium-Ordinary for €45,000. 
C) a credit to Share Capital-Ordinary for €55,000. 
D) a debit to Retained Earnings for €22,000.

Question 9

Norton, Inc.has 10,000 shares of 6%, $100 par value, noncumulative preference shares and 100,000 ordinary shares with a $1 par value outstanding at December 31, 2010, and December 31, 2011.The board of directors declared and paid a $50,000 dividend in 2010.In 2011, $110,000 of dividends are declared and paid.What are the dividends received by the preference and ordinary shareholders in 2011?

Accepted Answer

The answer of Norton, Inc.has 10,000 shares of 6%, $100...

Question 10

The effect of the declaration of a cash dividend by the board of directors is to

Accepted Answer

The answer of The effect of the declaration of a...

Question 11

Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 8%, €50 par value preference shares which it sold for €54 per share at the beginning of 2009.The company has never paid preference dividends.As of December 31, 2011, dividends in arrears are

Accepted Answer

A) €88,000. 
B) €132,000. 
C) €162,000. 
D) €142,560. 
A) €88,000. 
B) €132,000. 
C) €162,000. 
D) €142,560.

Question 12

If a shareholder receives a dividend that reduces retained earnings by the fair value of the shares, the shareholder has received a

Accepted Answer

A) large share dividend. 
B) cash dividend. 
C) contingent dividend. 
D) small share dividend. 
A) large share dividend. 
B) cash dividend. 
C) contingent dividend. 
D) small share dividend.

Question 13

If Vickers Company issues 4,000 ordinary shares with a $5 par value for $140,000,

Accepted Answer

A) Share Capital-Ordinary will be credited for $140,000. 
B) Share Premium-Ordinary will be credited for $20,000. 
C) Share Premium-Ordinary will be credited for $120,000. 
D) Cash will be debited for $120,000. 
A) Share Capital-Ordinary will be credited for $140,000. 
B) Share Premium-Ordinary will be credited for $20,000. 
C) Share Premium-Ordinary will be credited for $120,000. 
D) Cash will be debited for $120,000.

Question 14

Dawson Company issued 500 no-par ordinary shares for $ \$ 4,500 $. Which of the following journal entries would be made if the shares have a stated value of $ \$ 2 $ per share?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 15

Ordinary Share Dividends Distributable is reported as share premium in the equity section.

Accepted Answer

A) True 
 B)False

Question 16

Share dividends and share splits have the following effects on retained earnings:

Accepted Answer

The answer of Share dividends and share splits have the...

Question 17

If a corporation declares a dividend out of share capital or share premium, it is known as a

Accepted Answer

A) scrip dividend. 
B) property dividend. 
C) paid dividend. 
D) liquidating dividend. 
A) scrip dividend. 
B) property dividend. 
C) paid dividend. 
D) liquidating dividend.

Question 18

Each of the following decreases total equity except a

Accepted Answer

A) cash dividend. 
B) liquidating dividend. 
C) share dividend. 
D) All of these decrease total equity. 
A) cash dividend. 
B) liquidating dividend. 
C) share dividend. 
D) All of these decrease total equity.

Question 19

In the financial statements, organization costs appears

Accepted Answer

A) immediately below Retained Earnings in the equity section. 
B) in the income statement. 
C) as part of share premium in the equity section. 
D) as an intangible asset. 
A) immediately below Retained Earnings in the equity section. 
B) in the income statement. 
C) as part of share premium in the equity section. 
D) as an intangible asset.

Question 20

The effect a declaration and distribution of a share dividend has on the par value per share is a(an)

Accepted Answer

A) increase. 
B) decrease. 
C) increase or decrease. 
D) no effect. 
A) increase. 
B) decrease. 
C) increase or decrease. 
D) no effect.

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

Treasury Shares are a(n)

The cost of a noncash asset acquired in exchange for ordinary shares should be either the fair value of the consideration given up, or the fair value of the consideration received, whichever is more clearly determinable.

A typical organization chart showing delegation of authority would show

Restricted retained earnings are available for preference share dividends but unavailable for ordinary share dividends.

If a corporation has only one class of shares, it is referred to as

Jahnke Corporation issued 5,000 shares of €2 par value ordinary shares for €11 per share.The journal entry to record the sale will include

The effect of the declaration of a cash dividend by the board of directors is to

Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 8%, €50 par value preference shares which it sold for €54 per share at the beginning of 2009.The company has never paid preference dividends.As of December 31, 2011, dividends in arrears are

If a shareholder receives a dividend that reduces retained earnings by the fair value of the shares, the shareholder has received a

If Vickers Company issues 4,000 ordinary shares with a $5 par value for $140,000,

Dawson Company issued 500 no-par ordinary shares for $\$ 4,500$ . Which of the following journal entries would be made if the shares have a stated value of $\$ 2$ per share?

Ordinary Share Dividends Distributable is reported as share premium in the equity section.

Share dividends and share splits have the following effects on retained earnings:

If a corporation declares a dividend out of share capital or share premium, it is known as a

Each of the following decreases total equity except a

In the financial statements, organization costs appears

The effect a declaration and distribution of a share dividend has on the par value per share is a(an)

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters

Exam 11: Corporations: Organization, Share Transactions, Dividends,and Retained Earnings

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

Treasury Shares are a(n)

The cost of a noncash asset acquired in exchange for ordinary shares should be either the fair value of the consideration given up, or the fair value of the consideration received, whichever is more clearly determinable.

A typical organization chart showing delegation of authority would show

Restricted retained earnings are available for preference share dividends but unavailable for ordinary share dividends.

If a corporation has only one class of shares, it is referred to as

Jahnke Corporation issued 5,000 shares of €2 par value ordinary shares for €11 per share.The journal entry to record the sale will include

The effect of the declaration of a cash dividend by the board of directors is to

Freidrichs Company has issued and outstanding 11,000 shares of cumulative, 8%, €50 par value preference shares which it sold for €54 per share at the beginning of 2009.The company has never paid preference dividends.As of December 31, 2011, dividends in arrears are

If a shareholder receives a dividend that reduces retained earnings by the fair value of the shares, the shareholder has received a

If Vickers Company issues 4,000 ordinary shares with a $5 par value for $140,000,

Dawson Company issued 500 no-par ordinary shares for $4,500 \$ 4,500 $4,500 . Which of the following journal entries would be made if the shares have a stated value of $2 \$ 2 $2 per share?

Ordinary Share Dividends Distributable is reported as share premium in the equity section.

Share dividends and share splits have the following effects on retained earnings:

If a corporation declares a dividend out of share capital or share premium, it is known as a

Each of the following decreases total equity except a

In the financial statements, organization costs appears

The effect a declaration and distribution of a share dividend has on the par value per share is a(an)

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Payroll Accounting

Other Significant Liabilities

Filters

Dawson Company issued 500 no-par ordinary shares for $\$ 4,500$ . Which of the following journal entries would be made if the shares have a stated value of $\$ 2$ per share?