Question 1

Authorized shares are the total number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 2

Buying shares in a corporation is attractive to investors because:

Accepted Answer

A)  Shareholders are not liable for the corporation's actions and debts. 
B)  Shares are easily transferred. 
C)  A corporation has unlimited life. 
D)  Shareholders are not agents of the corporation. 
E)  All of these answers are correct. 
A)  Shareholders are not liable for the corporation's actions and debts. 
B)  Shares are easily transferred. 
C)  A corporation has unlimited life. 
D)  Shareholders are not agents of the corporation. 
E)  All of these answers are correct.

Question 3

Income tax expense is recorded with the operating expenses on the income statement for a corporation.

Accepted Answer

A) True 
 B)False

Question 4

Preferred shares may be issued instead of common shares:

Accepted Answer

A)  To increase financial leverage. 
B)  To prevent dilution of voting ownership. 
C)  To appeal to investors who believe that common shares are too risky. 
D)  To increase the return earned by common shareholders. 
E)  All of these answers are correct. 
A)  To increase financial leverage. 
B)  To prevent dilution of voting ownership. 
C)  To appeal to investors who believe that common shares are too risky. 
D)  To increase the return earned by common shareholders. 
E)  All of these answers are correct.

Question 5

Explain the procedure for preparing journal entries for the declaration and distribution of cash dividends.

Accepted Answer

When the board of directors declares a d

Question 6

The payment of a dividend will reduce the following two accounts:

Accepted Answer

A)  Common shares and cash 
B)  Cash and dividends payable. 
C)  Equity and retained earnings. 
D)  Retained earnings and dividends payable 
E)  Equity and cash 
A)  Common shares and cash 
B)  Cash and dividends payable. 
C)  Equity and retained earnings. 
D)  Retained earnings and dividends payable 
E)  Equity and cash

Question 7

Preferred shares are seen by some investors as being less risky and having a greater dividend rate than common shares.

Accepted Answer

A) True 
 B)False

Question 8

Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

Accepted Answer

A) True 
 B)False

Question 9

The journal entry to record distribution of a cash dividend paid to common shareholders includes a debit to _____________________ and a credit to _________.

Accepted Answer

Common Div

Question 10

A privately held corporation has a limited life because it is tied to the physical lives of its owners.

Accepted Answer

A) True 
 B)False

Question 11

A corporation is responsible for its own acts and debts.This is so because a corporation is _____________________.

Accepted Answer

A separate

Question 12

Sheryl Inc.is authorized to issue 70,000,$9,cumulative preferred shares,and 750,000 common shares.Prepare journal entries to record the following transactions that occurred during the first year of operations:

Accepted Answer

The answer of Sheryl Inc.is authorized to issue 70,000,$9,cumulative preferred...

Question 13

Net incomes or losses and dividends of a corporation are recorded in the _____________ account.

Accepted Answer

The answer of Net incomes or losses and dividends of...

Question 14

Dillon Snowboards Ltd issued 60 no-par-value common shares for $10,000.The amount of contributed capital arising from this transaction is:

Accepted Answer

A)  $100. 
B)  $600. 
C)  $1,000. 
D)  $6,000. 
E)  $10,000. 
A)  $100. 
B)  $600. 
C)  $1,000. 
D)  $6,000. 
E)  $10,000.

Question 15

Organization costs may be paid for by giving shares to promoters of a corporation in exchange for their services in organizing the corporation.

Accepted Answer

A) True 
 B)False

Question 16

Discuss the differences between common and preferred shares.

Accepted Answer

Both common and preferred shares represe

Question 17

Kim Corporation had the following shares outstanding when the board of directors declared a $103,000 cash dividend:   Allocate the dividend between the preferred and common shareholders assuming the preferred shares are cumulative and are one year in arrears.

Accepted Answer

The answer of Kim Corporation had the following shares outstanding...

Question 18

The shareholders can vote to pay themselves a dividend.

Accepted Answer

A) True 
 B)False

Question 19

The equity section of a corporation's balance sheet is called Corporation Equity.

Accepted Answer

A) True 
 B)False

Question 20

If a corporation that has only one class of shares,or if there is more than one class,the class that has no preference over the other classes of shares,is called:

Accepted Answer

A)  Preferred shares. 
B)  Common shares. 
C)  Convertible preferred shares. 
D)  Cumulative preferred shares. 
E)  Participating preferred shares. 
A)  Preferred shares. 
B)  Common shares. 
C)  Convertible preferred shares. 
D)  Cumulative preferred shares. 
E)  Participating preferred shares.

Authorized shares are the total number of shares outstanding.

Buying shares in a corporation is attractive to investors because:

Income tax expense is recorded with the operating expenses on the income statement for a corporation.

Preferred shares may be issued instead of common shares:

Explain the procedure for preparing journal entries for the declaration and distribution of cash dividends.

The payment of a dividend will reduce the following two accounts:

Preferred shares are seen by some investors as being less risky and having a greater dividend rate than common shares.

Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

The journal entry to record distribution of a cash dividend paid to common shareholders includes a debit to _____________ and a credit to _.

A privately held corporation has a limited life because it is tied to the physical lives of its owners.

A corporation is responsible for its own acts and debts.This is so because a corporation is _____________________.

Sheryl Inc.is authorized to issue 70,000,$9,cumulative preferred shares,and 750,000 common shares.Prepare journal entries to record the following transactions that occurred during the first year of operations:

Net incomes or losses and dividends of a corporation are recorded in the _____________ account.

Dillon Snowboards Ltd issued 60 no-par-value common shares for $10,000.The amount of contributed capital arising from this transaction is:

Organization costs may be paid for by giving shares to promoters of a corporation in exchange for their services in organizing the corporation.

Discuss the differences between common and preferred shares.

Kim Corporation had the following shares outstanding when the board of directors declared a $103,000 cash dividend: Allocate the dividend between the preferred and common shareholders assuming the preferred shares are cumulative and are one year in arrears.

The shareholders can vote to pay themselves a dividend.

The equity section of a corporation's balance sheet is called Corporation Equity.

If a corporation that has only one class of shares,or if there is more than one class,the class that has no preference over the other classes of shares,is called:

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 13: Organization and Operation of Corporations

Authorized shares are the total number of shares outstanding.

Buying shares in a corporation is attractive to investors because:

Income tax expense is recorded with the operating expenses on the income statement for a corporation.

Preferred shares may be issued instead of common shares:

Explain the procedure for preparing journal entries for the declaration and distribution of cash dividends.

The payment of a dividend will reduce the following two accounts:

Preferred shares are seen by some investors as being less risky and having a greater dividend rate than common shares.

Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders.

The journal entry to record distribution of a cash dividend paid to common shareholders includes a debit to _____________________ and a credit to _________.

A privately held corporation has a limited life because it is tied to the physical lives of its owners.

A corporation is responsible for its own acts and debts.This is so because a corporation is _____________________.

Sheryl Inc.is authorized to issue 70,000,$9,cumulative preferred shares,and 750,000 common shares.Prepare journal entries to record the following transactions that occurred during the first year of operations:

Net incomes or losses and dividends of a corporation are recorded in the _____________ account.

Dillon Snowboards Ltd issued 60 no-par-value common shares for $10,000.The amount of contributed capital arising from this transaction is:

Organization costs may be paid for by giving shares to promoters of a corporation in exchange for their services in organizing the corporation.

Discuss the differences between common and preferred shares.

Kim Corporation had the following shares outstanding when the board of directors declared a $103,000 cash dividend: Allocate the dividend between the preferred and common shareholders assuming the preferred shares are cumulative and are one year in arrears.

The shareholders can vote to pay themselves a dividend.

The equity section of a corporation's balance sheet is called Corporation Equity.

If a corporation that has only one class of shares,or if there is more than one class,the class that has no preference over the other classes of shares,is called:

Property,plant and Equipment,and Intangibles

Current Liabilities

Partnerships

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

The journal entry to record distribution of a cash dividend paid to common shareholders includes a debit to _____________ and a credit to _.