Exam 11: Stockholders Equity

A) dividends paid on common stock divided by the average number of outstanding common shares.
B) the difference between net income and preferred dividends divided by the average number of outstanding common shares.
C) total dividends paid divided by the average number of total stock shares.
D) net income divided by average stockholders' equity.

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A) Stock shares that pay a fixed dividend rate but have no voting rights.
B) The shares of stock held by stockholders.
C) Stock that allows owners to be listed among creditors.
D) This payment raises stockholders' equity.
E) This payment decreases stockholders' equity.
F) The shares of stock held by the issuing company.
G) Earnings per share that reflects treasury and preferred stock.
H) (Net income less preferred dividends) divided by average stockholders' equity.
I) This dividend does not reduce stockholders' equity.
J) Stockholders' entitlement to remaining assets after creditors are repaid.
K) The additional shares of stock a company can issue beyond what are already issued.
L) (Net income less preferred dividends) divided by the average number of outstanding common shares.
M) When a company first starts selling stock to the public.

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A) credit to Salary Expense.
B) credit to each partner's Capital account.
C) credit to each partner's Drawing account.
D) debit to Salary Expense.

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A) preferred stockholders are paid dividends before common stockholders are paid dividends for the current year only.
B) unpaid dividends to preferred stockholders accumulate and must be paid before common stockholders receive dividends.
C) preferred stockholders are paid their full fixed dividend rate each period as long as the company is in operation.
D) unpaid cash dividends to preferred stockholders must be replaced with stock dividends during the current period.

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A) When a company reissues treasury stock for more than it originally paid for the stock,it does not report a gain.
B) When a company purchases treasury stock,it increases total stockholders' equity.
C) Treasury stock is reported as an asset on the balance sheet.
D) Treasury stock is reported as issued and outstanding stock.

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A) $70,000 for Jackson and $130,000 for O'Neill for a total of $200,000.
B) $200,000 minus income tax expense for the partnership.
C) $200,000 minus the income tax paid by each partner.
D) $50,000 for Jackson and $150,000 for O'Neill for a total of $200,000.

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A) Stock shares that pay a fixed dividend rate but have no voting rights.
B) The shares of stock held by stockholders.
C) Stock that allows owners to be listed among creditors.
D) This payment raises stockholders' equity.
E) This payment decreases stockholders' equity.
F) The shares of stock held by the issuing company.
G) Earnings per share that reflects treasury and preferred stock.
H) (Net income less preferred dividends) divided by average stockholders' equity.
I) This dividend does not reduce stockholders' equity.
J) Stockholders' entitlement to remaining assets after creditors are repaid.
K) The additional shares of stock a company can issue beyond what are already issued.
L) (Net income less preferred dividends) divided by the average number of outstanding common shares.
M) When a company first starts selling stock to the public.

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A) To reduce the number of outstanding shares.
B) To give the impression that the stock is worth buying.
C) To have shares of stock to issue when stock options are exercised.
D) To increase the total stockholders' equity balance and improve the ROE.

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A) Stock shares that pay a fixed dividend rate but have no voting rights.
B) The shares of stock held by stockholders.
C) Stock that allows owners to be listed among creditors.
D) This payment raises stockholders' equity.
E) This payment decreases stockholders' equity.
F) The shares of stock held by the issuing company.
G) Earnings per share that reflects treasury and preferred stock.
H) (Net income less preferred dividends) divided by average stockholders' equity.
I) This dividend does not reduce stockholders' equity.
J) Stockholders' entitlement to remaining assets after creditors are repaid.
K) The additional shares of stock a company can issue beyond what are already issued.
L) (Net income less preferred dividends) divided by the average number of outstanding common shares.
M) When a company first starts selling stock to the public.

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A) reduce the market price of a share of stock and make it more attractive to some investors.
B) increase the market price of a share of stock to help maximize the stockholders' wealth.
C) increase a stockholders' ownership percentage in the corporation.
D) increase the corporation's Retained Earnings.

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A) how the company chose to finance its operations.
B) the method of depreciation.
C) the inventory costing method.
D) classification of debt as current or long-term.

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A) the number of shares outstanding may vary.
B) EPS is not a meaningful measure.
C) Retained Earnings may vary.
D) the price per share may vary.

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A) To demonstrate to investors that it believes its own stock is worth purchasing.
B) To obtain shares to reissue to employees as part of an employee stock plan.
C) To obtain shares that can be reissued as payment for purchase of another company.
D) To increase the number of shares of outstanding stock.

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A) Retained Earnings
B) Common Stock
C) Additional Paid-In Capital
D) Cash

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A) small stock dividends;stock splits
B) large stock dividends;small stock dividends
C) stock splits;small stock dividends
D) large stock dividends;stock splits

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A) Its dividends may be paid at a fixed rate.
B) It has a higher priority for the distribution of assets than common stock.
C) It has a higher priority for the payment of dividends than common stock.
D) It generally has voting rights.

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