Question 1

Additional paid-in capital includes all of the following except the amounts paid in

Accepted Answer

A)  over par value.
B)  over stated value.
C)  from treasury stock.
D)  for the par value of common stock.

Question 2

A stockholder has the right to vote in the election of the board of directors.

Accepted Answer

A) True 
 B)False

Question 3

A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares.

Accepted Answer

A) True 
 B)False

Question 4

The declaration and distribution of a stock dividend will

Accepted Answer

A)  increase total stockholders' equity.
B)  increase total assets.
C)  decrease total assets.
D)  have no effect on total assets.

Question 5

A prior period adjustment for understatement of net income will

Accepted Answer

A)  be credited to the Retained Earnings account.
B)  be debited to the Retained Earnings account.
C)  show as a gain on the current year's Income Statement.
D)  show as an asset on the current year's Balance Sheet.

Question 6

Each of the following is reported for common stock except the

Accepted Answer

A)  par value.
B)  shares issued.
C)  shares outstanding.
D)  liquidation value.

Question 7

A retained earnings statement shows the same information as a corporation income statement.

Accepted Answer

A) True 
 B)False

Question 8

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share. The company issued 3,000 shares of stock to acquire land recently advertised at $100,000. When recording this transaction, Barton Company will

Accepted Answer

A)  debit Land for $100,000.
B)  credit Common Stock for $93,000.
C)  debit Land for $93,000.
D)  credit Paid-In Capital in Excess of Par for $93,000.

Question 9

If a stockholder cannot attend a stockholder's meeting, he may delegate his voting rights by means of

Accepted Answer

A)  an absentee ballot.
B)  a proxy.
C)  a certified letter.
D)  a telegram.

Question 10

Which of the following statements about retained earnings restrictions is incorrect?

Accepted Answer

A)  Many states require a corporation to restrict retained earnings for the cost of treasury stock purchased.
B)  Long-term debt contracts may impose a restriction on retained earnings as a condition for the loan.
C)  The board of directors of a corporation may voluntarily create retained earnings restrictions for specific purposes.
D)  Retained earnings restrictions are generally disclosed through a journal entry on the books of a company.

Question 11

If Vickers Company issues 5,000 shares of $5 par value common stock for $175,000,

Accepted Answer

A)  Common Stock will be credited for $175,000.
B)  Paid-In Capital in Excess of Par will be credited for $25,000.
C)  Paid-In Capital in Excess of Par will be credited for $150,000.
D)  Cash will be debited for $150,000.

Question 12

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 13

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Accepted Answer

A)  Common Stock will be credited for $45,000.
B)  Paid-in Capital in Excess of Par will be credited for $45,000.
C)  Paid-in Capital in Excess of Par will be credited for $160,000.
D)  Cash will be debited for $115,000.

Question 14

Reserves include each of the following except

Accepted Answer

A)  other comprehensive income items.
B)  revaluation surplus.
C)  share premium.
D)  unrealized gains on available-for-sale securities.

Question 15

A corporation acts under its own name rather than in the name of its stockholders.

Accepted Answer

A) True 
 B)False

Question 16

At December 31, the stockholders' equity of Smith Company was as follow:  The book value per share of common stock is

Accepted Answer

A)  $7.00
B)  $7.20
C)  $8.40
D)  $7.70

Question 17

Outstanding stock of the Core Corporation included 20,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par noncumulative preferred stock. In 2014, Core declared and paid dividends of $4,000. In 2015, Core declared and paid dividends of $12,000. How much of the 2015 dividend was distributed to preferred shareholders?

Accepted Answer

A)  $8,000
B)  $4,000
C)  $6,000
D)  None of these answers are correct

Question 18

A dividend based on paid-in capital is termed a liquidating dividend.

Accepted Answer

A) True 
 B)False

Question 19

The sale of common stock below par

Accepted Answer

A)  is a common occurrence in most states.
B)  is not permitted in most states.
C)  is a practice that most stockholders encourage.
D)  requires that a liability be recorded for the difference between the sales price and the par value of the shares.

Question 20

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity ratio for Marley?

Accepted Answer

A)  19.3%
B)  16.7%
C)  12.5%
D)  10.0%

Exam 11: Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

The declaration and distribution of a stock dividend will

Correct Answer
verified

A dividend based on paid-in capital is termed a liquidating dividend.

Correct Answer
verified

Each of the following is reported for common stock except the

Correct Answer
verified

Which of the following statements about retained earnings restrictions is incorrect?

Correct Answer
verified

A stockholder has the right to vote in the election of the board of directors.

Correct Answer
verified

If a stockholder cannot attend a stockholder's meeting, he may delegate his voting rights by means of

Correct Answer
verified

A corporation acts under its own name rather than in the name of its stockholders.

Correct Answer
verified

The sale of common stock below par

Correct Answer
verified

A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares.

Correct Answer
verified

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Correct Answer
verified

At December 31, the stockholders' equity of Smith Company was as follow: The book value per share of common stock is

Correct Answer
verified

Reserves include each of the following except

Correct Answer
verified

If Vickers Company issues 5,000 shares of $5 par value common stock for $175,000,

Correct Answer
verified

Correct Answer
verified

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Correct Answer
verified

Additional paid-in capital includes all of the following except the amounts paid in

Correct Answer
verified

A prior period adjustment for understatement of net income will

Correct Answer
verified

A retained earnings statement shows the same information as a corporation income statement.

Correct Answer
verified

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share. The company issued 3,000 shares of stock to acquire land recently advertised at $100,000. When recording this transaction, Barton Company will

Correct Answer
verified

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity ratio for Marley?

Correct Answer
verified

Exam 11: Corporations: Organization, Stock Transactions, Dividends, and Retained Earnings

The declaration and distribution of a stock dividend will

Correct AnswerverifiedShow Answer

A dividend based on paid-in capital is termed a liquidating dividend.

Correct AnswerverifiedShow Answer

Each of the following is reported for common stock except the

Correct AnswerverifiedShow Answer

Which of the following statements about retained earnings restrictions is incorrect?

Correct AnswerverifiedShow Answer

A stockholder has the right to vote in the election of the board of directors.

Correct AnswerverifiedShow Answer

If a stockholder cannot attend a stockholder's meeting, he may delegate his voting rights by means of

Correct AnswerverifiedShow Answer

A corporation acts under its own name rather than in the name of its stockholders.

Correct AnswerverifiedShow Answer

The sale of common stock below par

Correct AnswerverifiedShow Answer

A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares.

Correct AnswerverifiedShow Answer

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Correct AnswerverifiedShow Answer

At December 31, the stockholders' equity of Smith Company was as follow: The book value per share of common stock is

Correct AnswerverifiedShow Answer

Reserves include each of the following except

Correct AnswerverifiedShow Answer

If Vickers Company issues 5,000 shares of $5 par value common stock for $175,000,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If Keene Company issues 9,000 shares of $5 par value common stock for $160,000, the account

Correct AnswerverifiedShow Answer

Additional paid-in capital includes all of the following except the amounts paid in

Correct AnswerverifiedShow Answer

A prior period adjustment for understatement of net income will

Correct AnswerverifiedShow Answer

A retained earnings statement shows the same information as a corporation income statement.

Correct AnswerverifiedShow Answer

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share. The company issued 3,000 shares of stock to acquire land recently advertised at $100,000. When recording this transaction, Barton Company will

Correct AnswerverifiedShow Answer

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity ratio for Marley?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified