Question 1

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Accepted Answer

A) True 
 B)False  True

Question 2

Book value per share:

Accepted Answer

A) Measures the worth of assets. 
B) Is assets divided by the number of common shares outstanding. 
C) Is equal to par value per share. 
D) Reflects the value per share if a company is liquidated at balance sheet amounts. 
E) Is assets divided by equity. 
A) Measures the worth of assets. 
B) Is assets divided by the number of common shares outstanding. 
C) Is equal to par value per share. 
D) Reflects the value per share if a company is liquidated at balance sheet amounts. 
E) Is assets divided by equity. D

Question 3

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Accepted Answer

A) True 
 B)False  True

Question 4

Minimum legal capital requirements are intended to protect creditors.

Accepted Answer

A) True 
 B)False

Question 5

Paid and declared preferred dividends are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 6

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

Accepted Answer

A) True 
 B)False

Question 7

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

Accepted Answer

A) True 
 B)False

Question 8

Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common stock on June 30 for $40 per share. On July 20, it reissued 50 of these shares at $46 per share. On August 1, it reissued 20 of the shares at $38 per share. What is the journal entry necessary to record the reissuance of treasury stock on July 20?

Accepted Answer

A) Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300. 
B) Debit Common Stock $2,300; credit Cash $2,300. 
C) Debit Cash $2,300; credit Treasury Stock $2,300. 
D) Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000. 
E) Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300. 
A) Debit Common Stock $20; debit Treasury Stock $2,290; credit Cash $2,300. 
B) Debit Common Stock $2,300; credit Cash $2,300. 
C) Debit Cash $2,300; credit Treasury Stock $2,300. 
D) Debit Cash $2,300; credit Paid-in Capital, Treasury Stock $300; credit Treasury Stock $2,000. 
E) Debit Common Stock $2,300; credit Treasury Stock $2,000; credit Paid-In Capital, Treasury Stock $300.

Question 9

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Accepted Answer

A) Always equal to its stated value. 
B) Referred to as retained earnings. 
C) Always equal to its par value. 
D) Referred to as paid-in capital. 
E) Always below its stated value. 
A) Always equal to its stated value. 
B) Referred to as retained earnings. 
C) Always equal to its par value. 
D) Referred to as paid-in capital. 
E) Always below its stated value.

Question 10

Retained earnings:

Accepted Answer

A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception. 
B) Represents the amount shareholders are guaranteed to receive upon company liquidation. 
C) Represent an amount of cash available to pay shareholders. 
D) Are never adjusted for anything other than net income or dividends. 
E) Can only be appropriated by setting aside a cash fund. 
A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception. 
B) Represents the amount shareholders are guaranteed to receive upon company liquidation. 
C) Represent an amount of cash available to pay shareholders. 
D) Are never adjusted for anything other than net income or dividends. 
E) Can only be appropriated by setting aside a cash fund.

Question 11

If a corporation receives assets other than cash in exchange for stock, it records the assets received at their market value as of the date of the transaction.

Accepted Answer

A) True 
 B)False

Question 12

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

Accepted Answer

A) Investors' purchase price of the stock. 
B) Earnings per share. 
C) Amount of cash. 
D) Common stock's market value. 
E) Amount of retained earnings. 
A) Investors' purchase price of the stock. 
B) Earnings per share. 
C) Amount of cash. 
D) Common stock's market value. 
E) Amount of retained earnings.

Question 13

A company had a beginning balance in retained earnings of $400,000. It had net income of $50,000 and paid out cash dividends of $55,000 in the current period. The ending balance in retained earnings equals:

Accepted Answer

A) $505,000. 
B) $350,000. 
C) $395,000. 
D) $455,000. 
E) $405,000. 
A) $505,000. 
B) $350,000. 
C) $395,000. 
D) $455,000. 
E) $405,000.

Question 14

Halverstein Company's outstanding stock consists of 7,000 shares of cumulative 5% preferred stock with a $10 par value and 3,000 shares of common stock with a $1 par value. During the first three years of operation, the corporation declared and paid the following total cash dividends. $$\begin{array}{l}

\begin{array} { l r r } &\text { Dividend Declared }\
\text { year 1 } & \$ 0 \
\text { year 2 } & \$ 6,000 \
\text { year 3 } & \$ 32,000 \
\end{array}
\end{array}$$ The amount of dividends paid to preferred and common shareholders in Year 2 is:

Accepted Answer

A) $3,000 preferred; $3,000 common. 
B) $3,500 preferred; $2,500 common. 
C) $0 preferred; $6,000 common. 
D) $4,200 preferred; $1,800 common. 
E) $6,000 preferred; $0 common. 
A) $3,000 preferred; $3,000 common. 
B) $3,500 preferred; $2,500 common. 
C) $0 preferred; $6,000 common. 
D) $4,200 preferred; $1,800 common. 
E) $6,000 preferred; $0 common.

Question 15

Large stock dividends are recorded at par or stated value.

Accepted Answer

A) True 
 B)False

Question 16

A stock split increases total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 17

A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of paid-in capital is:

Accepted Answer

A) $600. 
B) $100. 
C) $6,000. 
D) $7,000. 
E) $1,000. 
A) $600. 
B) $100. 
C) $6,000. 
D) $7,000. 
E) $1,000.

Question 18

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:

Accepted Answer

A) Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000. 
B) Debit Common Stock $27,500; credit Cash $27,500. 
C) Debit Cash $27,500; credit Common Stock $27,500. 
D) Debit Treasury Stock $27,500; credit Cash $27,500. 
E) Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500. 
A) Debit Cash $27,500; credit Paid-in Capital in Excess of Par Value, Common Stock $2,500; credit Common Stock $25,000. 
B) Debit Common Stock $27,500; credit Cash $27,500. 
C) Debit Cash $27,500; credit Common Stock $27,500. 
D) Debit Treasury Stock $27,500; credit Cash $27,500. 
E) Debit Treasury Stock $2,500; debit Paid-in Capital in Excess of Par Value, Treasury Stock $25,000; credit Common Stock $27,500.

Question 19

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

Accepted Answer

A) True 
 B)False

Question 20

Changes in retained earnings are commonly reported in the:

Accepted Answer

A) Single-step income statement. 
B) Statement of stockholders' equity. 
C) Balance sheet. 
D) Multiple-step income statement. 
E) Statement of cash flows. 
A) Single-step income statement. 
B) Statement of stockholders' equity. 
C) Balance sheet. 
D) Multiple-step income statement. 
E) Statement of cash flows.

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Book value per share:

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Minimum legal capital requirements are intended to protect creditors.

Paid and declared preferred dividends are called dividends in arrears.

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Retained earnings:

If a corporation receives assets other than cash in exchange for stock, it records the assets received at their market value as of the date of the transaction.

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

A company had a beginning balance in retained earnings of $400,000. It had net income of $50,000 and paid out cash dividends of $55,000 in the current period. The ending balance in retained earnings equals:

Large stock dividends are recorded at par or stated value.

A stock split increases total stockholders' equity.

A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of paid-in capital is:

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

Changes in retained earnings are commonly reported in the:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

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Exam 13: Accounting for Corporations

Dividend yield is defined as the annual cash dividends per share divided by the market price per share of a company's stock.

Book value per share:

Stock is attractive to investors because stockholders are not liable for the corporation's actions and debts and because stock is easily transferred.

Minimum legal capital requirements are intended to protect creditors.

Paid and declared preferred dividends are called dividends in arrears.

A corporation may not legally give shares of its stock to promoters in exchange for their services in organizing the corporation.

Participating preferred stock has a feature that allows its holders to share with common shareholders in any dividends paid in excess of the percent or dollar amount stated on the preferred stock.

The total amount of cash and other assets received by a corporation from its stockholders in exchange for its stock is:

Retained earnings:

If a corporation receives assets other than cash in exchange for stock, it records the assets received at their market value as of the date of the transaction.

Dividend yield is the percent of cash dividends paid to common shareholders relative to the:

A company had a beginning balance in retained earnings of $400,000. It had net income of $50,000 and paid out cash dividends of $55,000 in the current period. The ending balance in retained earnings equals:

Large stock dividends are recorded at par or stated value.

A stock split increases total stockholders' equity.

A company issued 60 shares of $100 par value common stock for $7,000 cash. The total amount of paid-in capital is:

A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:

Paid-in capital is the total amount of cash and other assets the corporation receives from its stockholders in exchange for its stock.

Changes in retained earnings are commonly reported in the:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters