Question 1

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

Accepted Answer

A) Discount on stock. 
B) Premium on stock. 
C) Treasury stock. 
D) Stock dividend. 
E) Stock subscription. 
A) Discount on stock. 
B) Premium on stock. 
C) Treasury stock. 
D) Stock dividend. 
E) Stock subscription.

Question 2

Ultimate Sportswear has $100,000 of 8% noncumulative, nonparticipating, preferred stock outstanding. Ultimate Sportswear also has $500,000 of common stock outstanding. In the company's first year of operation, no dividends were paid. During the second year, the company paid cash dividends of $30,000. This dividend should be distributed as follows:

Accepted Answer

A) $0 preferred; $30,000 common. 
B) $7,500 preferred; $22,500 common. 
C) $8,000 preferred; $22,000 common. 
D) $15,000 preferred; $15,000 common. 
E) $16,000 preferred; $14,000 common. 
A) $0 preferred; $30,000 common. 
B) $7,500 preferred; $22,500 common. 
C) $8,000 preferred; $22,000 common. 
D) $15,000 preferred; $15,000 common. 
E) $16,000 preferred; $14,000 common.

Question 3

A corporation is a legal entity separate from its owners.

Accepted Answer

A) True 
 B)False

Question 4

Robin Company had net income of $67,000. The company had 9,000 weighted average common shares outstanding. The basic earnings per share equal $7.44 per share.

Accepted Answer

A) True 
 B)False

Question 5

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: $\begin{array} { l  }
 \text {Retained earnings }&\$750,000 \
 \text { Shares issued and outstanding}&60,000 \
 \text {Market value per share }&\$15 \
 \text {  Par value per share}& \$5\
\end{array}$
 The amount that contributed capital will increase (decrease)as a result of recording this stock dividend is:

Accepted Answer

A) $(135,000). 
B) $135,000. 
C) $(45,000). 
D) $45,000. 
E) $0. 
A) $(135,000). 
B) $135,000. 
C) $(45,000). 
D) $45,000. 
E) $0.

Question 6

Organization expenses of a corporation often include legal fees and promoter fees.

Accepted Answer

A) True 
 B)False

Question 7

The Discount on Common Stock account reflects:

Accepted Answer

A) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. 
B) One share's portion of the issued corporation's net assets recorded in its accounts. 
C) The difference between the par value of the stock and the amount paid-in by stockholders when the amount paid-in is more than par value. 
D) The difference between the par value of stock and its issue price when it is issued at a price below par value. 
E) The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock. 
A) An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. 
B) One share's portion of the issued corporation's net assets recorded in its accounts. 
C) The difference between the par value of the stock and the amount paid-in by stockholders when the amount paid-in is more than par value. 
D) The difference between the par value of stock and its issue price when it is issued at a price below par value. 
E) The amount a corporation must pay in addition to dividends in arrears if and when it exercises its right to retire a share of callable preferred stock.

Question 8

A reverse stock split increases the market value per share and the par value per share of stock.

Accepted Answer

A) True 
 B)False

Question 9

Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be:

Accepted Answer

A) Debit Cash $312,000; credit Stock Liability $286,000; credit Common Stock $26,000. 
B) Debit Common Stock $26,000; credit Cash $26,000. 
C) Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value, Common Stock $286,000. 
D) Debit Common Stock $26,000; debit Paid-in Capital in Excess of Par Value, Common Stock $286,000; credit Cash $312,000. 
E) Debit Cash for $312,000; credit Common Stock $312,000. 
A) Debit Cash $312,000; credit Stock Liability $286,000; credit Common Stock $26,000. 
B) Debit Common Stock $26,000; credit Cash $26,000. 
C) Debit Cash $312,000; credit Common Stock $26,000; credit Paid-in Capital in Excess of Par Value, Common Stock $286,000. 
D) Debit Common Stock $26,000; debit Paid-in Capital in Excess of Par Value, Common Stock $286,000; credit Cash $312,000. 
E) Debit Cash for $312,000; credit Common Stock $312,000.

Question 10

Treasury stock is stock that has been authorized, issued, and is outstanding.

Accepted Answer

A) True 
 B)False

Question 11

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Accepted Answer

A) Debit Cash $50,000; credit Common Stock $50,000. 
B) Debit Common Stock $50,000; credit Cash $50,000. 
C) Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value, Common Stock $5,000; credit Common Stock $45,000. 
D) Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000. 
E) Debit Treasury Stock $50,000; credit Cash $50,000. 
A) Debit Cash $50,000; credit Common Stock $50,000. 
B) Debit Common Stock $50,000; credit Cash $50,000. 
C) Debit Common Stock $25,000; debit Paid-in Capital in Excess of Par Value, Common Stock $5,000; credit Common Stock $45,000. 
D) Debit Cash $50,000; credit Paid-in Capital in Excess of Stated Value, Common Stock $45,000; credit Common Stock $5,000. 
E) Debit Treasury Stock $50,000; credit Cash $50,000.

Question 12

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share is:

Accepted Answer

A) $4.89. 
B) $1.31. 
C) $1.65. 
D) $1.99. 
E) $0.34. 
A) $4.89. 
B) $1.31. 
C) $1.65. 
D) $1.99. 
E) $0.34.

Question 13

The statement of changes in stockholders' equity:

Accepted Answer

A) Describes changes in paid-in capital and retained earnings subcategories. 
B) Does not include changes in treasury stock. 
C) Is reported by very few companies. 
D) Is part of the statement of retained earnings. 
E) Shows only the ending balances in stockholders' equity. 
A) Describes changes in paid-in capital and retained earnings subcategories. 
B) Does not include changes in treasury stock. 
C) Is reported by very few companies. 
D) Is part of the statement of retained earnings. 
E) Shows only the ending balances in stockholders' equity.

Question 14

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

Accepted Answer

A) 21.4%. 
B) 2.4%. 
C) 9.9%. 
D) 24.2%. 
E) 2.0%. 
A) 21.4%. 
B) 2.4%. 
C) 9.9%. 
D) 24.2%. 
E) 2.0%.

Question 15

A stock dividend is recorded with a transfer from:

Accepted Answer

A) Contributed capital to assets. 
B) Assets to contributed capital. 
C) Contributed capital to retained earnings. 
D) Retained earnings to assets. 
E) Retained earnings to paid-in capital. 
A) Contributed capital to assets. 
B) Assets to contributed capital. 
C) Contributed capital to retained earnings. 
D) Retained earnings to assets. 
E) Retained earnings to paid-in capital.

Question 16

Treasury stock is classified as:

Accepted Answer

A) A contra asset account. 
B) A liability account. 
C) An asset account. 
D) A revenue account. 
E) A contra equity account. 
A) A contra asset account. 
B) A liability account. 
C) An asset account. 
D) A revenue account. 
E) A contra equity account.

Question 17

What is treasury stock? What reasons might a company hold treasury stock?

Accepted Answer

Treasury stock is the company's own issu

Question 18

A corporation received its charter and began business this year. The company is authorized to issue 500,000 shares of $100 par, 6%, noncumulative, nonparticipating preferred stock, and 1,000,000 shares of no-par common stock. The following selected transactions occurred during this year:
Mar. 5 Issued 250 shares of preferred stock for $102 cash per share.
July 15 Exchanged 750 shares of common stock for $12,000 in legal services incurred in the organization of the company.
Prepare journal entries to record these transactions.

Accepted Answer

The answer of A corporation received its charter and began...

Question 19

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 20

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

Accepted Answer

A) True 
 B)False

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

A corporation is a legal entity separate from its owners.

Robin Company had net income of $67,000. The company had 9,000 weighted average common shares outstanding. The basic earnings per share equal $7.44 per share.

Organization expenses of a corporation often include legal fees and promoter fees.

The Discount on Common Stock account reflects:

A reverse stock split increases the market value per share and the par value per share of stock.

Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be:

Treasury stock is stock that has been authorized, issued, and is outstanding.

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share is:

The statement of changes in stockholders' equity:

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

A stock dividend is recorded with a transfer from:

Treasury stock is classified as:

What is treasury stock? What reasons might a company hold treasury stock?

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

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

A corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called a:

A corporation is a legal entity separate from its owners.

Robin Company had net income of $67,000. The company had 9,000 weighted average common shares outstanding. The basic earnings per share equal $7.44 per share.

Organization expenses of a corporation often include legal fees and promoter fees.

The Discount on Common Stock account reflects:

A reverse stock split increases the market value per share and the par value per share of stock.

Comfort Mattresses, Inc. sold 26,000 shares of its $1 par value common stock at a cash price of $12 per share. The entry to record this transaction would be:

Treasury stock is stock that has been authorized, issued, and is outstanding.

A corporation issued 5,000 shares of its no par common stock that was assigned a $1 stated value per share. The issue price was $10 per share. The entry to record this transaction would be:

Mayan Company had net income of $132,000. The weighted-average common shares outstanding were 80,000. The company declared a $27,000 dividend on its noncumulative, nonparticipating preferred stock. There were no other stock transactions. The company's earnings per share is:

The statement of changes in stockholders' equity:

A company paid $0.85 in cash dividends per share. Its earnings per share is $3.50, and its market price per share is $35.50. Its dividend yield equals:

A stock dividend is recorded with a transfer from:

Treasury stock is classified as:

What is treasury stock? What reasons might a company hold treasury stock?

A common statutory restriction is reported on the income statement whereas; a common contractual restriction is reported in the stockholders' equity section of the balance sheet.

If a corporation is authorized to issue 1,000 shares of $5 common stock, it is said to have $5,000 of stock outstanding.

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