Question 1

One of the main disadvantages of the corporate form is the

Accepted Answer

A)  professional management 
B)  double taxation of dividends 
C)  charter 
D)  corporation must issue stock 
A)  professional management 
B)  double taxation of dividends 
C)  charter 
D)  corporation must issue stock

Question 2

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 3

The authorized stock of a corporation

Accepted Answer

A)  must be recorded in a formal accounting entry. 
B)  only reflects the initial capital needs of the company. 
C)  is indicated in its by-laws. 
D)  is indicated in its charter. 
A)  must be recorded in a formal accounting entry. 
B)  only reflects the initial capital needs of the company. 
C)  is indicated in its by-laws. 
D)  is indicated in its charter.

Question 4

Vincent Corporation has 100,000 share of $100 par common stock outstanding. On June 30, Vincent Corporation declared a 5% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $132 a share on June 30. Journalize the entries required on June 30, July 15 and July 30.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 5

Match between columns
                        Premises: treasury stock
declaration date
preferred stock
cash dividend
payment date
record date
stock dividends distributable
additional paid in capital

Accepted Answer

The Answer of the date that a share of stock is...

Question 6

If 50,000 shares are authorized, 41,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 43,000.

Accepted Answer

A) True 
 B)False

Question 7

Prepare entries to record the following:

Accepted Answer

(a)
 @#IMG-DLM&_TB2085_00_TB2085_00 (b)

Question 8

The balance in Retained Earnings at the end of the period is created by closing entries.

Accepted Answer

A) True 
 B)False

Question 9

Before a stock dividend can be declared or paid, there must be sufficient cash.

Accepted Answer

A) True 
 B)False

Question 10

The retained earnings statement may be combined with the income statement.

Accepted Answer

A) True 
 B)False

Question 11

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

Question 12

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

Accepted Answer

A)  treasury stock 
B)  issued stock 
C)  outstanding stock 
D)  authorized stock 
A)  treasury stock 
B)  issued stock 
C)  outstanding stock 
D)  authorized stock

Question 13

A corporation issues 2,500 shares of common stock for $ 45,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

Accepted Answer

A)  $25,000 
B)  $45,000 
C)  $20,000 
D)  $ 5,000 
A)  $25,000 
B)  $45,000 
C)  $20,000 
D)  $ 5,000

Question 14

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Accepted Answer

A)  $80,000 
B)  $10,000 
C)  $90,000 
D)  $100,000 
A)  $80,000 
B)  $10,000 
C)  $90,000 
D)  $100,000

Question 15

The entry to record the issuance of common stock at a price above par includes a debit to

Accepted Answer

A)  Organizational Expenses 
B)  Common Stock 
C)  Cash 
D)  Paid-In Capital in Excess of Par-Common Stock 
A)  Organizational Expenses 
B)  Common Stock 
C)  Cash 
D)  Paid-In Capital in Excess of Par-Common Stock

Question 16

A large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.

Accepted Answer

A) True 
 B)False

Question 17

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

Accepted Answer

A)  $25 
B)  $150 
C)  $5 
D)  $30 
A)  $25 
B)  $150 
C)  $5 
D)  $30

Question 18

The stock dividends distributable account is listed in the current liability section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 19

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

Accepted Answer

@#IMG-DLM&_TB2085_00

Question 20

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

Accepted Answer

A) True 
 B)False

One of the main disadvantages of the corporate form is the

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

The authorized stock of a corporation

If 50,000 shares are authorized, 41,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 43,000.

Prepare entries to record the following:

The balance in Retained Earnings at the end of the period is created by closing entries.

Before a stock dividend can be declared or paid, there must be sufficient cash.

The retained earnings statement may be combined with the income statement.

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

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

A corporation issues 2,500 shares of common stock for $ 45,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

The entry to record the issuance of common stock at a price above par includes a debit to

A large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

The stock dividends distributable account is listed in the current liability section of the balance sheet.

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 13: Corporations: Organization, Stock Transactions, and Dividends

One of the main disadvantages of the corporate form is the

The cost of treasury stock is deducted from total paid-in capital and retained earnings in determining total stockholders' equity.

The authorized stock of a corporation

If 50,000 shares are authorized, 41,000 shares are issued, and 2,000 shares are reacquired, the number of outstanding shares is 43,000.

Prepare entries to record the following:

The balance in Retained Earnings at the end of the period is created by closing entries.

Before a stock dividend can be declared or paid, there must be sufficient cash.

The retained earnings statement may be combined with the income statement.

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

The state charter allows a corporation to issue only a certain number of shares of each class of stock. This amount of stock is called

A corporation issues 2,500 shares of common stock for $ 45,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

The entry to record the issuance of common stock at a price above par includes a debit to

A large public corporation normally uses registrars and transfer agents to maintain records of the stockholders.

A corporation has 50,000 shares of $25 par value stock outstanding that has a current market value of $150. If the corporation issues a 5-for-1 stock split, the market value of the stock after the split will be approximately:

The stock dividends distributable account is listed in the current liability section of the balance sheet.

Indicate whether the following actions would (+) increase, (-) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.

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

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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