Question 1

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

Accepted Answer

A)   the fair market value of the asset acquired.
B)   the original cost of the asset acquired.
C)   the fair market value of the common shares given up.
D)   the book value of the common shares given up.

Question 2

Companies must have enough cash before they can declare a cash dividend.

Accepted Answer

A) True 
 B)False

Question 3

The ways that a corporation can be classified by purpose are

Accepted Answer

A)   general and limited.
B)   profit and non-profit.
C)   provincial and federal.
D)   publicly held and privately held.

Question 4

Kean's Pumping, Inc. has 20,000, $4, cumulative preferred shares issued at $150, and 100,000 common shares issued at $1, at December 31, 2014. If the board of directors declares a $60,000 dividend, the

Accepted Answer

A)   preferred shareholders will receive 1/10th of what the common shareholders will receive.
B)   preferred shareholders will receive the entire $60,000.
C)   $60,000 will be held as restricted retained earnings and paid out at some future date.
D)   preferred shareholders will receive $30,000 and the common shareholders will receive $30,000.

Question 5

Dividends are distributed from retained earnings.

Accepted Answer

A) True 
 B)False

Question 6

When the retained earnings has a debit balance it is called a "deficit".

Accepted Answer

A) True 
 B)False

Question 7

In cases where the fair value of the services and noncash assets cannot be reliably measured, the shares issued should be recorded at the amortized cost of the noncash assets.

Accepted Answer

A) True 
 B)False

Question 8

Match between columns
                        Premises: Government regulations
Continuous life
Ability to acquire capital
Potential for deferred or reduced tax
Transferable ownership rights
Limited liability of shareholders
Potential for additional tax
Separate legal entity

Accepted Answer

The Answer of Advantage and Disadvantage is...

Question 9

Under IFRS, there is a section in Shareholders Equity on the balance sheet called accumulated other comprehensive income.

Accepted Answer

A) True 
 B)False

Question 10

When a company is liquidated, the common shares will receive proceeds before the preferred shares.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following would NOT be considered an advantage of the corporate form of organization?

Accepted Answer

A)   Limited liability of owners
B)   Separate legal existence
C)   Continuous life
D)   Government regulation

Question 12

A distribution of a corporation's profit to its shareholders is referred to as

Accepted Answer

A)   a shareholder bonus.
B)   wages and salaries expense.
C)   a share distribution.
D)   a dividend.

Question 13

The statement of retained earnings

Accepted Answer

A)   is required as part of the financial statements under ASPE.
B)   will show income taxes paid during the year.
C)   will never show losses.
D)   will, in some cases, fail to reconcile the beginning and ending retained earnings balances.

Question 14

Dividends are declared out of

Accepted Answer

A)   Common Shares.
B)   Preferred Shares.
C)   Retained Earnings.
D)   Profit.

Question 15

Which of the following would NOT be true of a privately held corporation?

Accepted Answer

A)   It is sometimes called a closely held corporation.
B)   Its shares are regularly traded on the Toronto Stock Exchange.
C)   It does not offer its shares for sale to the general public.
D)   It is usually smaller than a publicly held company.

Question 16

The statement that reflects the changes in retained earnings for the period is called a statement of retained earnings.

Accepted Answer

A) True 
 B)False

Question 17

Dividends in arrears are not considered a liability.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Accepted Answer

A)   additional taxes
B)   government regulations
C)   limited liability of shareholders
D)   separation of ownership and management

Question 19

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Accepted Answer

A)   corporation is organized for the purpose of making a profit.
B)   corporation is subject to numerous federal and provincial government regulations.
C)   corporation is an accounting economic entity.
D)   corporation's temporary accounts are closed at the end of the accounting period.

Question 20

Dividends in arrears on cumulative preferred shares

Accepted Answer

A)   are considered to be a non-current liability.
B)   are considered to be a current liability.
C)   only occur when preferred dividends have been declared.
D)   should be disclosed in the notes to the financial statements.

Exam 13: Introduction to Corporations

Dividends are declared out of

Correct Answer
verified

The ways that a corporation can be classified by purpose are

Correct Answer
verified

The statement that reflects the changes in retained earnings for the period is called a statement of retained earnings.

Correct Answer
verified

When a company is liquidated, the common shares will receive proceeds before the preferred shares.

Correct Answer
verified

Which of the following would NOT be true of a privately held corporation?

Correct Answer
verified

Companies must have enough cash before they can declare a cash dividend.

Correct Answer
verified

A distribution of a corporation's profit to its shareholders is referred to as

Correct Answer
verified

Instructions For each characteristic determine if it is an Advantage (A). or Disadvantage (D) to being incorporated.

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Correct Answer
verified

The statement of retained earnings

Correct Answer
verified

In cases where the fair value of the services and noncash assets cannot be reliably measured, the shares issued should be recorded at the amortized cost of the noncash assets.

Correct Answer
verified

When the retained earnings has a debit balance it is called a "deficit".

Correct Answer
verified

Kean's Pumping, Inc. has 20,000, $4, cumulative preferred shares issued at $150, and 100,000 common shares issued at $1, at December 31, 2014. If the board of directors declares a $60,000 dividend, the

Correct Answer
verified

Which one of the following would NOT be considered an advantage of the corporate form of organization?

Correct Answer
verified

Dividends in arrears on cumulative preferred shares

Correct Answer
verified

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

Correct Answer
verified

Dividends are distributed from retained earnings.

Correct Answer
verified

Dividends in arrears are not considered a liability.

Correct Answer
verified

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Correct Answer
verified

Under IFRS, there is a section in Shareholders Equity on the balance sheet called accumulated other comprehensive income.

Correct Answer
verified

Exam 13: Introduction to Corporations

Dividends are declared out of

Correct AnswerverifiedShow Answer

The ways that a corporation can be classified by purpose are

Correct AnswerverifiedShow Answer

The statement that reflects the changes in retained earnings for the period is called a statement of retained earnings.

Correct AnswerverifiedShow Answer

When a company is liquidated, the common shares will receive proceeds before the preferred shares.

Correct AnswerverifiedShow Answer

Which of the following would NOT be true of a privately held corporation?

Correct AnswerverifiedShow Answer

Companies must have enough cash before they can declare a cash dividend.

Correct AnswerverifiedShow Answer

A distribution of a corporation's profit to its shareholders is referred to as

Correct AnswerverifiedShow Answer

Instructions For each characteristic determine if it is an Advantage (A). or Disadvantage (D) to being incorporated.

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Correct AnswerverifiedShow Answer

The statement of retained earnings

Correct AnswerverifiedShow Answer

In cases where the fair value of the services and noncash assets cannot be reliably measured, the shares issued should be recorded at the amortized cost of the noncash assets.

Correct AnswerverifiedShow Answer

When the retained earnings has a debit balance it is called a "deficit".

Correct AnswerverifiedShow Answer

Kean's Pumping, Inc. has 20,000, $4, cumulative preferred shares issued at $150, and 100,000 common shares issued at $1, at December 31, 2014. If the board of directors declares a $60,000 dividend, the

Correct AnswerverifiedShow Answer

Which one of the following would NOT be considered an advantage of the corporate form of organization?

Correct AnswerverifiedShow Answer

Dividends in arrears on cumulative preferred shares

Correct AnswerverifiedShow Answer

Under IFRS, corporations that issue shares in return for noncash assets should record the transaction at

Correct AnswerverifiedShow Answer

Dividends are distributed from retained earnings.

Correct AnswerverifiedShow Answer

Dividends in arrears are not considered a liability.

Correct AnswerverifiedShow Answer

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Correct AnswerverifiedShow Answer

Under IFRS, there is a section in Shareholders Equity on the balance sheet called accumulated other comprehensive income.

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