Question 1

Alma Corp. issues 1,000 shares of $10 par common stock at $14 per share. When the transaction is recorded, credit(s) are made to

Accepted Answer

A)  Common Stock, $14,000 
B)  Common Stock, $10,000, and Paid-In Capital in Excess of Par, $4,000 
C)  Common Stock, $4,000, and Paid-In Capital in Excess of Stated Value, $10,000 
D)  Common Stock, $10,000, and Retained Earnings, $4,000 
A)  Common Stock, $14,000 
B)  Common Stock, $10,000, and Paid-In Capital in Excess of Par, $4,000 
C)  Common Stock, $4,000, and Paid-In Capital in Excess of Stated Value, $10,000 
D)  Common Stock, $10,000, and Retained Earnings, $4,000

Question 2

Sabas Company has 20,000 shares of $100 par, 1% noncumulative preferred stock and 100,000 shares of $50 par common stock. The following amounts were distributed as dividends: $\begin{array}{lr}
\text { Year 1: } & \$ 10,000 \
\text { Year 2: } & 15,000 \
\text { Year 3: } & 90,000
\end{array}$ ​
Determine the dividends per share for preferred and common stock for each year.

Accepted Answer

The answer of Sabas Company has 20,000 shares of $100...

Question 3

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

Accepted Answer

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

Question 4

Organizational expenses are classified as intangible assets on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 5

The declaration of a stock dividend decreases a corporation's stockholders' equity and increases its liabilities.

Accepted Answer

A) True 
 B)False

Question 6

Twenty percent of all businesses in the United States are corporations, and they account for 80% of the total business dollars generated.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements is not true about a 2-for-1 split?

Accepted Answer

A)  Par value per share is reduced to half of what it was before the split. 
B)  Total contributed capital increases. 
C)  The market price will probably decrease. 
D)  A stockholder with ten shares before the split owns twenty shares after the split. 
A)  Par value per share is reduced to half of what it was before the split. 
B)  Total contributed capital increases. 
C)  The market price will probably decrease. 
D)  A stockholder with ten shares before the split owns twenty shares after the split.

Question 8

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

Accepted Answer

A)  35,000 
B)  70,000 
C)  25,000 
D)  30,000 
A)  35,000 
B)  70,000 
C)  25,000 
D)  30,000

Question 9

Those most responsible for the major policy decisions of a corporation are the

Accepted Answer

A)  management 
B)  board of directors 
C)  employees 
D)  stockholders 
A)  management 
B)  board of directors 
C)  employees 
D)  stockholders

Question 10

A reduction of par or stated value of stock results from a

Accepted Answer

A)  liquidating dividend 
B)  stock split 
C)  stock option 
D)  preferred dividend 
A)  liquidating dividend 
B)  stock split 
C)  stock option 
D)  preferred dividend

Question 11

The liability for a dividend is recorded on which of the following dates?

Accepted Answer

A)  the date of record 
B)  the date of payment 
C)  the last day of the fiscal year 
D)  the date of declaration 
A)  the date of record 
B)  the date of payment 
C)  the last day of the fiscal year 
D)  the date of declaration

Question 12

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

Accepted Answer

A) True 
 B)False

Question 13

A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

Accepted Answer

A)  $0 
B)  $5,000 
C)  $2,500 
D)  $10,000 
A)  $0 
B)  $5,000 
C)  $2,500 
D)  $10,000

Question 14

The two main sources of stockholders' equity are​

Accepted Answer

A)  ​investments by stockholders and net income retained in the business 
B)  ​​investments by stockholders and dividends paid 
C)  ​net income retained in the business and dividends paid 
D)  ​investments by stockholders and purchases of assets 
A)  ​investments by stockholders and net income retained in the business 
B)  ​​investments by stockholders and dividends paid 
C)  ​net income retained in the business and dividends paid 
D)  ​investments by stockholders and purchases of assets

Question 15

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

Accepted Answer

A) True 
 B)False

Question 16

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Accepted Answer

A)  ​decrease total liabilities and stockholders' equity 
B)  ​increase total expenses and total liabilities 
C)  ​increase total assets and stockholders' equity 
D)  ​decrease total assets and stockholders' equity 
A)  ​decrease total liabilities and stockholders' equity 
B)  ​increase total expenses and total liabilities 
C)  ​increase total assets and stockholders' equity 
D)  ​decrease total assets and stockholders' equity

Question 17

Sabas Company has 40,000 shares of $100 par, 1% preferred stock and 100,000 shares of $50 par common stock issued and outstanding. The following amounts were distributed as dividends: $\begin{array}{lr}
\text { Year 1: } & \$ 50,000 \
\text { Year 2: } & 90,000 \
\text { Year 3: } & 130,000
\end{array}$ ​
Determine the dividends per share for preferred and common stock for each year.

Accepted Answer

The answer of Sabas Company has 40,000 shares of $100...

Question 18

Significant changes in stockholders' equity are reported in

Accepted Answer

A)  income statement 
B)  retained earnings statement 
C)  statement of stockholders' equity 
D)  statement of cash flows 
A)  income statement 
B)  retained earnings statement 
C)  statement of stockholders' equity 
D)  statement of cash flows

Question 19

If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,

Accepted Answer

A)  Common Stock will be credited for $75,000 
B)  Paid-In Capital in Excess of Par will be credited for $9,000 
C)  Paid-In Capital in Excess of Par will be credited for $66,000 
D)  Cash will be debited for $66,000 
A)  Common Stock will be credited for $75,000 
B)  Paid-In Capital in Excess of Par will be credited for $9,000 
C)  Paid-In Capital in Excess of Par will be credited for $66,000 
D)  Cash will be debited for $66,000

Question 20

Which statement below is not a reason for a corporation to buy back its own stock?

Accepted Answer

A)  resale to employees 
B)  bonus to employees 
C)  for supporting the market price of the stock 
D)  to increase the shares outstanding 
A)  resale to employees 
B)  bonus to employees 
C)  for supporting the market price of the stock 
D)  to increase the shares outstanding

Alma Corp. issues 1,000 shares of $10 par common stock at $14 per share. When the transaction is recorded, credit(s) are made to

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

Organizational expenses are classified as intangible assets on the balance sheet.

The declaration of a stock dividend decreases a corporation's stockholders' equity and increases its liabilities.

Twenty percent of all businesses in the United States are corporations, and they account for 80% of the total business dollars generated.

Which of the following statements is not true about a 2-for-1 split?

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

Those most responsible for the major policy decisions of a corporation are the

A reduction of par or stated value of stock results from a

The liability for a dividend is recorded on which of the following dates?

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

The two main sources of stockholders' equity are

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Significant changes in stockholders' equity are reported in

If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,

Which statement below is not a reason for a corporation to buy back its own stock?

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

Exam 12: Corporations: Organization, Stock Transactions, and Dividends

Alma Corp. issues 1,000 shares of $10 par common stock at $14 per share. When the transaction is recorded, credit(s) are made to

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

Organizational expenses are classified as intangible assets on the balance sheet.

The declaration of a stock dividend decreases a corporation's stockholders' equity and increases its liabilities.

Twenty percent of all businesses in the United States are corporations, and they account for 80% of the total business dollars generated.

Which of the following statements is not true about a 2-for-1 split?

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 30,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number of shares outstanding?

Those most responsible for the major policy decisions of a corporation are the

A reduction of par or stated value of stock results from a

The liability for a dividend is recorded on which of the following dates?

Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.

A corporation purchased 1,000 shares of its own $5 par common stock at $10 and subsequently sold 500 of the shares at $20. What is the amount of revenue realized from the sale?

The two main sources of stockholders' equity are​

The net increase or decrease in Retained Earnings for a period is recorded by closing entries.

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to

Significant changes in stockholders' equity are reported in

If Dakota Company issues 1,500 shares of $6 par common stock for $75,000,

Which statement below is not a reason for a corporation to buy back its own stock?

Accounting and Business

Double-Entry Accounting

Adjustments: Accruals and Deferrals

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Current, Installment Notes, and Contingencies

Liabilities: Bonds Payable

Statement of Cash Flows

Financial Statement Analysis

Investments

Filters

The two main sources of stockholders' equity are