Question 1

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IRFS is true except:

Accepted Answer

A) U.S.GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock. 
B) Only gains are recognized on retirements of treasury stock under IFRS. 
C) IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock. 
D) Gains are not recognized on retirements of treasury stock under U.S.GAAP. 
E) A company's assets and equity are always reduced by the amount paid for the retiring stock. 
A) U.S.GAAP applies the principle that companies do not record gains or losses on transactions involving their own stock. 
B) Only gains are recognized on retirements of treasury stock under IFRS. 
C) IFRS applies the principle that companies do not record gains or losses on transactions involving their own stock. 
D) Gains are not recognized on retirements of treasury stock under U.S.GAAP. 
E) A company's assets and equity are always reduced by the amount paid for the retiring stock. B

Question 2

Stockholders' equity consists of:

Accepted Answer

A) Long-term assets. 
B) Paid-in capital and retained earnings. 
C) Paid-in capital and par value. 
D) Retained earnings and cash. 
E) Premiums and discounts. 
A) Long-term assets. 
B) Paid-in capital and retained earnings. 
C) Paid-in capital and par value. 
D) Retained earnings and cash. 
E) Premiums and discounts. B

Question 3

Stock that is not assigned a value per share by the corporate charter is called _________.

Accepted Answer

no-par stock

Question 4

A stock dividend transfers:

Accepted Answer

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

Question 5

The price-earnings ratio is calculated by dividing:

Accepted Answer

A) Market value per share by earnings per share. 
B) Earnings per share by market value per share. 
C) Dividends per share by earnings per share. 
D) Dividends per share by market value per share. 
E) Market value per share by dividends per share. 
A) Market value per share by earnings per share. 
B) Earnings per share by market value per share. 
C) Dividends per share by earnings per share. 
D) Dividends per share by market value per share. 
E) Market value per share by dividends per share.

Question 6

If a corporation is authorized to issue 1,000 shares of $50 common stock,it is said to have $50,000 of stock outstanding.

Accepted Answer

A) True 
 B)False

Question 7

Sparrow Company had net income of $63,000.The company had 9,000 weighted average common shares outstanding.The basic earnings per share equal $7.00 per share.

Accepted Answer

A) True 
 B)False

Question 8

The amount of income earned per share of a company's outstanding common stock is known as:

Accepted Answer

A) Restricted retained earnings per share. 
B) Earnings per share. 
C) Continuing operations per share. 
D) Dividends per share. 
E) Book value per share. 
A) Restricted retained earnings per share. 
B) Earnings per share. 
C) Continuing operations per share. 
D) Dividends per share. 
E) Book value per share.

Question 9

A corporation had stockholders' equity on January 1 as follows:
 Common Stock,$5 par value,1,000,000 shares authorized,500,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,000,000; Retained Earnings,$3,000,000.Prepare journal entries to record the following transactions:

Accepted Answer

The answer of A corporation had stockholders' equity on January...

Question 10

A company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the payment of the dividend is:

Accepted Answer

A) Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500. 
B) Debit Common Dividends Payable $104,500; credit Cash $104,500. 
C) Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100. 
D) Debit Common Dividends Payable $100,100; credit Cash $100,100. 
E) Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000. 
A) Debit Retained Earnings $104,500; credit Common Dividends Payable $104,500. 
B) Debit Common Dividends Payable $104,500; credit Cash $104,500. 
C) Debit Retained Earnings $100,100; credit Common Dividends Payable $100,100. 
D) Debit Common Dividends Payable $100,100; credit Cash $100,100. 
E) Debit Retained Earnings $110,000; credit Common Dividends Payable $110,000.

Question 11

A company has earnings per share of $9.60.Its dividend per share is $0.50,its market price per share is $120,and its book value per share is $96.Its price-earnings ratio equals:

Accepted Answer

A) 9.6. 
B) 19.2. 
C) 12.5. 
D) 10.0. 
E) 8.5. 
A) 9.6. 
B) 19.2. 
C) 12.5. 
D) 10.0. 
E) 8.5.

Question 12

Quark Company earned $90,000 in income and paid cash dividends of $10,000 to preferred shareholders during the current year.Quark had 12,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.

Accepted Answer

Earnings per Share = Net Incom

Question 13

A corporation can issue two kinds of stock - common and preferred.

Accepted Answer

A) True 
 B)False

Question 14

Stockholders' equity consists of paid-in capital and retained earnings.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

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

Question 16

A company's board of directors votes to declare a cash dividend of $.75 per share.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

Accepted Answer

A) $10,250. 
B) $14,625. 
C) $ 7,125. 
D) $ 7,500. 
E) $11,250. 
A) $10,250. 
B) $14,625. 
C) $ 7,125. 
D) $ 7,500. 
E) $11,250.

Question 17

What is treasury stock?
 How is the purchase and sale of treasury stock recorded?

Accepted Answer

Treasury stock is the company's own issu

Question 18

All stock dividends are recorded at par value so there would never be a credit to the paid-in capital in excess of par value account.

Accepted Answer

A) True 
 B)False

Question 19

A company has 1,000 shares of $50 par value,4.5% cumulative and nonparticipating preferred stock and 10,000 shares of $10 par value common stock outstanding.The company paid total cash dividends of $1,000 in its first year of operation.The cash dividend that must be paid to preferred stockholders in the second year before any dividend is paid to common stockholders is:

Accepted Answer

A) $1,000. 
B) $1,250. 
C) $2,250. 
D) $3,500. 
E) $4,500. 
A) $1,000. 
B) $1,250. 
C) $2,250. 
D) $3,500. 
E) $4,500.

Question 20

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Accepted Answer

A) True 
 B)False

Exam 13: Accounting for Corporations

All of the following regarding accounting for Treasury Stock under U.S.GAAP and IRFS is true except:

Stockholders' equity consists of:

Stock that is not assigned a value per share by the corporate charter is called _________.

A stock dividend transfers:

The price-earnings ratio is calculated by dividing:

If a corporation is authorized to issue 1,000 shares of $50 common stock,it is said to have $50,000 of stock outstanding.

Sparrow Company had net income of $63,000.The company had 9,000 weighted average common shares outstanding.The basic earnings per share equal $7.00 per share.

The amount of income earned per share of a company's outstanding common stock is known as:

A corporation had stockholders' equity on January 1 as follows: Common Stock,$5 par value,1,000,000 shares authorized,500,000 shares issued; Paid-in Capital in Excess of Par Value,Common Stock,$1,000,000; Retained Earnings,$3,000,000.Prepare journal entries to record the following transactions:

A company declared a $0.55 per share cash dividend.The company has 200,000 shares authorized,190,000 shares issued,and 8,000 shares in treasury stock.The journal entry to record the payment of the dividend is:

A company has earnings per share of $9.60.Its dividend per share is $0.50,its market price per share is $120,and its book value per share is $96.Its price-earnings ratio equals:

Quark Company earned $90,000 in income and paid cash dividends of $10,000 to preferred shareholders during the current year.Quark had 12,500 weighted-average shares of common stock outstanding for the year.Calculate the company's earnings per share.

A corporation can issue two kinds of stock - common and preferred.

Stockholders' equity consists of paid-in capital and retained earnings.

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

A company's board of directors votes to declare a cash dividend of $.75 per share.The company has 15,000 shares authorized,10,000 issued,and 9,500 shares outstanding.The total amount of the cash dividend is:

What is treasury stock? How is the purchase and sale of treasury stock recorded?

All stock dividends are recorded at par value so there would never be a credit to the paid-in capital in excess of par value account.

Earnings per share is the amount of income earned per share of a company's outstanding (weighted-average)common stock.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, 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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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