Question 1

The dividends yield is measured in terms of "times."

Accepted Answer

A) True 
 B)False  False

Question 2

Which of the following phrases is not descriptive of the corporate form of business?

Accepted Answer

A)  Professional management 
B)  Continuous existence 
C)  Double taxation 
D)  Unlimited liability 
A)  Professional management 
B)  Continuous existence 
C)  Double taxation 
D)  Unlimited liability D

Question 3

Beckham Corporation has 3,000 shares of $100 par value, 7 percent cumulative preferred stock, and 10,000 shares of $10 par value common stock outstanding during its first five years of operation. Beckham Corporation paid cash dividends as follows: 2006, $10,500; 2007, $0; 2008, $65,000; 2009, $30,000; 2010, $15,000. The amount of dividends the common stockholders received during 2006 was

Accepted Answer

A)  $0. 
B)  $5,250. 
C)  $10,500. 
D)  $15,750. 
A)  $0. 
B)  $5,250. 
C)  $10,500. 
D)  $15,750. A

Question 4

The following information relates to the number of common shares of the Nelly Corporation:
40,000 Authorized shares 15,000 Unissued shares 2,500 Treasury shares
Calculate the number of outstanding shares from the information given. Show your calculations.

Accepted Answer

22,500 shares outsta

Question 5

Which of the following could be described as both an advantage and a disadvantage of incorporation?

Accepted Answer

A)  Continuous existence 
B)  Limited liability 
C)  Double taxation 
D)  Lack of mutual agency 
A)  Continuous existence 
B)  Limited liability 
C)  Double taxation 
D)  Lack of mutual agency

Question 6

A corporation records a dividend-related liability

Accepted Answer

A)  on the payment date. 
B)  on the record date. 
C)  on the declaration date. 
D)  when the stock sells ex-dividend. 
A)  on the payment date. 
B)  on the record date. 
C)  on the declaration date. 
D)  when the stock sells ex-dividend.

Question 7

Sylmar Corporation has 30,000 shares of $100 stated value no-par common stock authorized, and 20,000 shares were outstanding during 2009. The following transactions relate to cash dividends of Sylmar Corporation for the year ended December 31, 2009. Prepare entries in journal form without explanations to record the following transactions:

Accepted Answer

The answer of Sylmar Corporation has 30,000 shares of $100...

Question 8

Berman Corporation was organized during 2010. In organizing, the company incurred the following costs:
1. Paid the state $900 for the corporate charter and related fees of incorporation.
2. Paid the attorney $2,500 for services rendered in connection with filing incorporation papers with the state.
3. Issued 500 shares of $5 par value common stock to an accountant in exchange for accounting services valued at $3,000.
Prepare the entries in journal form necessary to record the above transactions without explanations.

Accepted Answer

The answer of Berman Corporation was organized during 2010. In...

Question 9

A disadvantage of the corporate form of business is

Accepted Answer

A)  centralized authority and responsibility. 
B)  its status as a separate legal entity. 
C)  government regulation. 
D)  continuous existence. 
A)  centralized authority and responsibility. 
B)  its status as a separate legal entity. 
C)  government regulation. 
D)  continuous existence.

Question 10

The following information relates to the number of common shares of the Telly Corporation:
80,000 Authorized shares 30,000 Unissued shares 5,000 Treasury shares
Calculate the number of outstanding shares from the information given. Show your calculations.

Accepted Answer

45,000 shares outsta

Question 11

Dividends on cumulative preferred stock do not become a liability of the corporation until they are declared by the board of directors.

Accepted Answer

A) True 
 B)False

Question 12

Identify (by code letter) each of the following characteristics as being an advantage of (A), a disadvantage of (D), or not applicable to (N) the corporate form of business.

Accepted Answer

The answer of Identify (by code letter) each of the...

Question 13

Duncan Corporation has 2,000 shares of $100 par value, 6 percent cumulative preferred stock and 20,000 shares of $10 par value common stock outstanding. In its first four years of operation, Duncan Corporation paid cash dividends as follows: 2007, $15,000; 2008, $0; 2009, $20,000; 2010, $25,000. Calculate the total cash dividends received by owners of preferred and common stock in each year.

Accepted Answer

The answer of Duncan Corporation has 2,000 shares of $100...

Question 14

Treasury stock usually is recorded at par value when purchased.

Accepted Answer

A) True 
 B)False

Question 15

The limited liability of a stockholder can be viewed as both an advantage and a disadvantage.

Accepted Answer

A) True 
 B)False

Question 16

Dividends in arrears are dividends on

Accepted Answer

A)  noncumulative preferred stock that have not been declared for some specified period of time. 
B)  common stock that may never be declared. 
C)  cumulative preferred stock that have been declared but not yet paid. 
D)  cumulative preferred stock that have not been declared for some specified period of time. 
A)  noncumulative preferred stock that have not been declared for some specified period of time. 
B)  common stock that may never be declared. 
C)  cumulative preferred stock that have been declared but not yet paid. 
D)  cumulative preferred stock that have not been declared for some specified period of time.

Question 17

Outstanding shares of stock are

Accepted Answer

A)  authorized shares that have not yet been issued. 
B)  also called treasury shares. 
C)  shares of stock owned by unknown individuals. 
D)  issued shares that are still in circulation. 
A)  authorized shares that have not yet been issued. 
B)  also called treasury shares. 
C)  shares of stock owned by unknown individuals. 
D)  issued shares that are still in circulation.

Question 18

The board of directors of Irondale Corporation declared a cash dividend of $2.50 per share on 57,000 shares of common stock on June 14, 2010. The dividend is to be paid on July 15, 2010, to shareholders of record on July 1, 2010. The effects of the entry to record the declaration of the dividend on June 14, 2010 , are to

Accepted Answer

A)  decrease stockholders' equity and increase liabilities. 
B)  increase stockholders' equity and increase liabilities. 
C)  decrease stockholders' equity and decrease assets. 
D)  increase stockholders' equity and decrease assets. 
A)  decrease stockholders' equity and increase liabilities. 
B)  increase stockholders' equity and increase liabilities. 
C)  decrease stockholders' equity and decrease assets. 
D)  increase stockholders' equity and decrease assets.

Question 19

If a corporation has issued common stock at various prices that exceed par value, legal capital will be made up of the

Accepted Answer

A)  par value of the shares issued. 
B)  total stockholders' equity plus total liabilities. 
C)  total amount of contributed capital. 
D)  total amount of contributed capital plus retained earnings. 
A)  par value of the shares issued. 
B)  total stockholders' equity plus total liabilities. 
C)  total amount of contributed capital. 
D)  total amount of contributed capital plus retained earnings.

Question 20

Dividends in arrears cannot exist in conjunction with

Accepted Answer

A)  callable preferred stock. 
B)  convertible preferred stock. 
C)  noncumulative preferred stock. 
D)  cumulative preferred stock. 
A)  callable preferred stock. 
B)  convertible preferred stock. 
C)  noncumulative preferred stock. 
D)  cumulative preferred stock.

Exam 12: Contributed Capital

The dividends yield is measured in terms of "times."

Which of the following phrases is not descriptive of the corporate form of business?

The following information relates to the number of common shares of the Nelly Corporation: 40,000 Authorized shares 15,000 Unissued shares 2,500 Treasury shares Calculate the number of outstanding shares from the information given. Show your calculations.

Which of the following could be described as both an advantage and a disadvantage of incorporation?

A corporation records a dividend-related liability

A disadvantage of the corporate form of business is

The following information relates to the number of common shares of the Telly Corporation: 80,000 Authorized shares 30,000 Unissued shares 5,000 Treasury shares Calculate the number of outstanding shares from the information given. Show your calculations.

Dividends on cumulative preferred stock do not become a liability of the corporation until they are declared by the board of directors.

Identify (by code letter) each of the following characteristics as being an advantage of (A), a disadvantage of (D), or not applicable to (N) the corporate form of business.

Treasury stock usually is recorded at par value when purchased.

The limited liability of a stockholder can be viewed as both an advantage and a disadvantage.

Dividends in arrears are dividends on

Outstanding shares of stock are

If a corporation has issued common stock at various prices that exceed par value, legal capital will be made up of the

Dividends in arrears cannot exist in conjunction with

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems: Job Order Costing

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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