all of the following are normally found in a corporation's stockholders' equity section except

all of the following are normally found in a corporation's stockholders' equity section except


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Asked by 2 years ago
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Under the corporate form of business organization a. a stockholder is personally liable for the debts of the corporation b. stockholders' acts can bind the corporation even though the stockholders have not been appointed as agents of the corporation c. the corporation's life is stipulated in its charter d. stockholders wishing to sell their corporation shares must get the approval of other stockholdersC
Stockholders of a corporation directly elect a. the president of the corporation b. the board of directors c. the treasurer of the corporation d. all of the employees of the corporationB
Those most responsible for the major policy decisions of a corporation are the a. stockholders b. board of directors c. management d. employeesB
The chief accounting officer in a company is known as the a. controller b. treasurer c. vice-president d. presidentA
Which one of the following would not be considered an advantage of the corporate form of organization? a. Limited liability of stockholders b. Separate legal existence c. Continuous life d. Government regulationD
The two ways that a corporation can be classified by purpose are a. general and limited b. profit and not-for-profit c. state and federal d. publicly held and privately heldB
The two ways that a corporation can be classified by ownership are a. publicly held and privately held b. stock and non-stock c. inside and outside d. majority and minorityA
Which of the following would not be true of a privately held corporation? a. It is sometimes called a closely held corporation b. Its shares are regularly traded on the New York Stock Exchange c. It does not offer its shares for sale to the general public d. It is usually smaller than a publicly held companyB
Which of the following is not true of a corporation? a. It may buy, own, and sell property b. It may sue and be sued c. The acts of its owners bind the corporation d. It may enter into binding legal contracts in its own nameC
Which of the following statements reflects the transferability of ownership rights in a corporation? a. If a stockholder decides to transfer ownership, he must transfer all of his shares b. A stockholder may dispose of part or all of his shares c. A stockholder must obtain permission of the board of directors before selling shares d. A stockholder must obtain permission from at least three other stockholders before selling sharesB
A corporate board of directors does not generally a. select officers b. formulate operating policies c. declare dividends d. execute policyD
The officer that is generally responsible for maintaining the cash position of the corporation is the a. controller. b. treasurer c. cashier d. internal auditorB
The ability of a corporation to obtain capital is a. enhanced because of limited liability and ease of share transferability b. less than a partnership c. restricted because of the limited life of the corporation d. about the same as a partnershipA
Which of the following statements concerning taxation is accurate? a. Partnerships pay state income taxes but not federal income taxes b. Corporations pay federal income taxes but not state income taxes c. Corporations pay federal and state income taxes d. Only the owners must pay taxes on corporate incomeC
Which of the following statements is not considered a disadvantage of the corporate form of organization? a. Additional taxes b. Government regulations c. Limited liability of stockholders d. Separation of ownership and managementC
A disadvantage of the corporate form of organization is a. professional management b. tax treatment c. ease of transfer of ownership d. lack of mutual agencyB
Which one of the following is not an ownership right of a stockholder in a corporation? a. To vote in the election of directors b. To declare dividends on the common stock c. To share in assets upon liquidation d. To share in corporate earningsB
If no-par stock is issued without a stated value, then a. the par value is automatically $1 per share. b. the entire proceeds are considered to be legal capital. c. there is no legal capital. d. the corporation is automatically in violation of its state charterB
If a stockholder cannot attend a stockholders' meeting, he may delegate his voting rights by means of a(n) a. absentee ballot b. proxy c. certified letter d. telegramB
The term residual claim refers to a stockholders' right to a. receive dividends b. share in assets upon liquidation c. acquire additional shares when offered d. exercise a proxy voteB
Which of the following factors does not affect the initial market price of a stock? a. The company's anticipated future earnings b. The par value of the stock c. The current state of the economy d. The expected dividend rate per shareB
If an investment firm underwrites a stock issue, the a. risk of being unable to sell the shares stays with the issuing corporation b. corporation obtains cash immediately from the investment firm c. investment firm has guaranteed profits on the sale of the stock d. issuance of stock is likely to be directly to creditorsB
The par value of a stock a. is legally significant b. reflects the most recent market price c. is selected by the SEC d. is indicative of the worth of the stockA
Par value a. represents what a share of stock is worth b. represents the original selling price for a share of stock c. is established for a share of stock after it is issued d. is the value assigned per share in the corporate charterD
The term legal capital is a descriptive term for a. stockholders' equity b. par value c. residual equity d. market valueB
The authorized stock of a corporation a. only reflects the initial capital needs of the company b. is indicated in its by-laws c. is indicated in its charter d. must be recorded in a formal accounting entryC
The amount of stock that may be issued according to the corporation's charter is referred to as the a. authorized stock b. issued stock c. unissued stock d. outstanding stockA
If common stock is issued for an amount greater than par value, the excess should be credited to a. Cash b. Retained Earnings c. Paid-in Capital in Excess of Par Value d. Legal CapitalC
Paid-in Capital in Excess of Par Value a. is credited when no-par stock does not have a stated value b. is reported as part of paid-in capital on the balance sheet c. represents the amount of legal capital d. normally has a debit balanceB
The Paid-in Capital in Excess of Par Value is increased in the accounting records when a. the number of shares issued exceeds par value b. the stated value of capital stock is greater than the par value c. the market value of the stock rises above par value d. capital stock is issued at an amount greater than par valueD
Which of the following represents the largest number of common shares? a. Treasury shares b. Issued shares c. Outstanding shares d. Authorized sharesD
When stock is issued in exchange for a noncash asset, the value recorded for the shares issued is best determined by a. the book value of the noncash asset b. the market value of the shares c. the par value of the shares d. the contributed capital of the sharesB
If the market value of the assets received and the market value of the stock issued are both available, then what amount should be used to value the assets? a. Market value of the stock b. Market value of the assets c. Par value of the stock d. The more clearly determinable market valueD
Which of the following statements about treasury stock is true? a. Few corporations have treasury stock b. Purchasing treasury stock is done to eliminate hostile shareholder buyouts c. Companies acquire treasury stock to increase the number of shares outstanding d. Companies acquire treasury stock to decrease earnings per shareB
Treasury stock is a. stock issued by the U.S. Treasury Department b. stock purchased by a corporation and held as an investment in its treasury c. corporate stock issued by the treasurer of a company d. a corporation's own stock, which has been reacquired and held for future useD
The acquisition of treasury stock by a corporation a. increases its total assets and total stockholders' equity b. decreases its total assets and total stockholders' equity c. has no effect on total assets and total stockholders' equity d. requires that a gain or loss be recognized on the income statementB
Treasury stock should be reported in the financial statements of a corporation as a(n) a. investment b. liability c. deduction from total paid-in capital d. deduction from total paid-in capital and retained earningsD
A company would not acquire treasury stock a. in order to reissue shares to officers b. as an asset investment c. in order to increase trading of the company's stock d. to have additional shares available to use in acquisitions of other companiesB
Treasury Stock is a(n) a. contra asset account b. retained earnings account c. asset account d. contra stockholders' equity accountD
The number of shares of issued stock equals a. unissued shares minus authorized shares b. outstanding shares plus treasury shares c. authorized shares minus treasury shares d. outstanding shares plus authorized sharesB
Treasury shares plus outstanding shares equal a. authorized stock b. issued stock c. unissued stock d. distributable stockB
Which of the following is not a right or preference associated with preferred stock? a. The right to vote b. First claim to dividends c. Preference to corporate assets in case of liquidation d. To receive dividends in arrears before common stockholders receive dividendsA
Logan Corporation issues 40,000 shares of $50 par value preferred stock for cash at $60 per share. In the stockholders' equity section, the effects of the transaction above will be reported a. entirely within the capital stock section b. entirely within the additional paid-in capital section c. under both the capital stock and additional paid-in capital sections d. entirely under the retained earnings sectionC
Dividends in arrears on cumulative preferred stock a. never have to be paid, even if common dividends are paid b. must be paid before common stockholders can receive a dividend c. should be recorded as a current liability until they are paid d. enable the preferred stockholders to share equally in corporate earnings with the common stockholdersB
Dividends in arrears on cumulative preferred stock 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 statementsD
Dividends in arrears are dividends on a. cumulative preferred stock that have been declared but have not been paid b. non-cumulative preferred stock that have not been declared for a given period of time c. cumulative preferred stock that have not been declared for a given period of time d. common dividends that have been declared but have not yet been paidC
Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par non-cumulative preferred stock. In 2013, West declared and paid dividends of $4,000. In 2014, West declared and paid dividends of $12,000. How much of the 2014 dividend was distributed to preferred shareholders? a. $8,000 b. $14,000 c. $6,000 d. None of these answer choices are correctC
All of the following statements about preferred stock are true except a. preferred stock will have a paid-in capital account that is separate from other stock b. preferred stock is presented first on the stockholder's equity section c. preferred stock can be either par value or no-par value d. there can be only one class of preferred stockD
XYZ Company has $20,000 of dividends in arrears. Based on this information, which of the following statements is false? a. Dividends in arrears are not considered to be liabilities b. An obligation for dividends in arrears exists only after the board of directors declares payment c. The investment community looks favorably on companies with dividends in arrears, since the money is redirected toward more important growth opportunities d. The amount of dividends in arrears should be disclosed in the notes to the financial statementsC
Which one of the following is not necessary in order for a corporation to pay a cash dividend? a. Adequate cash b. Approval of stockholders c. Declared dividends d. Retained earningsB
The date on which a cash dividend becomes a binding legal obligation is on the a. declaration date b. date of record c. payment date d. last day of the fiscal year endA
The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to a. decrease total liabilities and stockholders' equity b. increase total expenses and total liabilities c. increase total assets and stockholders' equity d. decrease total assets and stockholders' equityD
The board of directors of Bosco Company declared a cash dividend on November 15, 2014, to be paid on December 15, 2014, to stockholders owning the stock on November 30, 2014. Given these facts, the date of November 30, 2014, is referred to as the a. declaration date b. record date c. payment date d. ex-dividend dateB
The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease a. Stockholders' equity Assets b. Assets Liabilities c. Liabilities Stockholders' equity d. Liabilities AssetsC
Which of the following is the appropriate general journal entry to record the declaration of cash dividends? a. Cash Dividends Cash b. Dividends Payable Cash c. Paid-in Capital Dividends Payable d. Cash Dividends Dividends PayableD
The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a a. debit to Dividends Payable b. debit to Cash Dividends c. credit to Cash d. credit to Cash DividendsB
The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The effects of the journal entry to record the declaration of the dividend on July 15, 2014, are to a. decrease stockholders' equity and increase liabilities b. decrease stockholders' equity and decrease assets c. increase stockholders' equity and increase liabilities d. increase stockholders' equity and decrease assetsA
The net effects on the corporation of the declaration and payment of a cash dividend are to a. decrease liabilities and decrease stockholders' equity b. increase stockholders' equity and decrease liabilities c. decrease assets and decrease stockholders' equity d. increase assets and increase stockholders' equityC
The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on August 15, 2014, will include a a. debit to Cash Dividends b. credit to Cash Dividends c. credit to Dividends Payable d. debit to Dividends PayableD
The board of directors of Benson Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The effects of the journal entry to record the payment of the dividend on August 15, 2014, are to a. decrease stockholders' equity and decrease liabilities b. decrease liabilities and decrease assets c. increase stockholders' equity and increase liabilities d. increase stockholders' equity and decrease assetsB
A corporation records a dividend-related liability a. on the record date b. on the payment date c. when dividends are in arrears d. on the declaration dateD
Common Stock Dividends Distributable is classified as a(n) a. asset account b. stockholders' equity account c. expense account d. liability accountB
The effect of a stock dividend is to a. decrease total assets and stockholders' equity b. change the composition of stockholders' equity c. decrease total assets and total liabilities d. increase the book value per share of common stockB
Stock dividends and stock splits have the following effects on retained earnings: Stock Splits Stock Dividends a. Increase No change b. No change Decrease c. Decrease Decrease d. No change No changeB
Dividends are predominantly paid in a. scrip b. property c. cash d. stockC
Of the four dividends types, the two most common types in practice are a. cash and scrip b. cash and property c. cash and stock d. property and stockC
Regular dividends are declared out of a. paid-in capital in excess of par value b. treasury stock c. common stock d. retained earningsD
Which of the following is not a significant date with respect to dividends? a. The declaration date b. The incorporation date c. The record date d. The payment dateB
On the dividend record date a. a dividend becomes a current obligation b. no entry is required c. an entry may be required if it is a stock dividend d. Dividends Payable is debitedB
Which of the following statements regarding the date of a cash dividend declaration is not accurate? a. The dividend can be rescinded once it has been declared b. The corporation is committed to a legal, binding obligation c. The board of directors formally authorizes the cash dividend d. A liability account must be increasedA
Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: Total Assets Total Liabilities Total Stockholders' Equity a. Increase Decrease No change b. No change Increase Decrease c. Decrease Increase Decrease d. Decrease No change IncreaseB
Which of the following statements about dividends is not accurate? a. Dividends are generally reported quarterly as a dollar amount per share b. Low dividends may mean high stock returns c. The board of directors is obligated to declare dividends d. Payment of dividends from legal capital is illegal in many statesC
Which of the following statements is not true about a 2-for-1 split? a. Par value per share is reduced to half of what it was before the split b. Total contributed capital increases c. The market price probably will decrease d. A stockholder with ten shares before the split owns twenty shares after the splitB
The board of directors must assign a per share value to a stock dividend declared that is a. greater than the par or stated value b. less than the par or stated value c. equal to the par or stated value d. at least equal to the par or stated valueD
Corporations generally issue stock dividends in order to a. increase the market price per share b. exceed stockholders' dividend expectations c. increase the marketability of the stock d. decrease the amount of capital in the corporationC
A stockholder who receives a stock dividend would a. expect the market price per share to increase b. own more shares of stock c. expect retained earnings to increase d. expect the par value of the stock to change.B
When stock dividends are distributed, a. Common Stock Dividends Distributable is decreased b. retained earnings is decreased c. Paid-in Capital in Excess of Par Value is debited if it is a small stock dividend d. no entry is necessary if it is a large stock dividendA
The per share amount normally assigned by the board of directors to a large stock dividend is a. the market value of the stock on the date of declaration b. the average price paid by stockholders on outstanding shares c. the par or stated value of the stock d. zeroC
The per share amount normally assigned by the board of directors to a small stock dividend is a. the market value of the stock on the date of declaration b. the average price paid by stockholders on outstanding shares c. the par or stated value of the stock d. zeroA
Identify the effect the declaration of a stock dividend has on the par value per share and book value per share. Par Value per Share Book Value per Share a. Increase Decrease b. No effect Increase c. Decrease Decrease d. No effect DecreaseD
Which of the following show the proper effect of a stock split and a stock dividend? Item Stock Split Stock Dividend a. Total paid-in capital Increase Increase b. Total retained earnings Decrease Decrease c. Total par value (common) Decrease Increase d. Par value per share Decrease No changeD
A stock split will a. have no effect on retained earnings b. increase total paid-in capital c. increase the total par value of the stock d. have no effect on the par value per share of stockA
Which of the following statements is not true about a 2-for-1 stock split? a. The market value of the stock will probably decrease b. A stockholder with 5 shares before the split owns 10 shares after the split c. Par value per share is reduced to half of what it was before the split d. Total paid-in capital increasesD
Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was a. 2-for-8 b. 8-for-1 c. 1-for-8 d. 4-for-1D
If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to a. decrease total assets and total stockholders' equity. b. increase stockholders' equity and to decrease total liabilities. c. decrease total retained earnings and increase total liabilities d. reduce the amount of retained earnings available for dividend declarationsD
A net loss a. occurs if operating expenses exceed cost of goods sold b. is not closed to Retained Earnings if it would result in a debit balance c. is closed to Retained Earnings even if it would result in a debit balance d. is closed to the Paid-in Capital account of the stockholders' equity section of the balance sheetC
Retained earnings are occasionally restricted a. to set aside cash for dividends b. to keep the legal capital associated with paid-in capital intact c. due to contractual loan restrictions d. if preferred dividends are in arrearsC
When retained earnings are restricted, total retained earnings a. are unaffected b. increase c. decrease d. may increase or decreaseA
Placing a restriction on retained earnings will a. assure that a company has sufficient cash for a specific purpose b. increase total stockholders' equity c. communicate to readers a portion of retained earnings is unavailable for dividends d. decrease total stockholders' equityC
All of the following statements regarding retained earnings are true except a. retained earnings represents a claim on cash b. a debit balance in Retained Earnings indicates a deficit c. some companies may restrict availability of retained earnings for dividends d. retained earnings is net income that a company retains in a businessA
In the stockholders' equity section of the balance sheet a. Common Stock Dividends Distributable will be classified as part of additional paid-in capital b. Common Stock Dividends Distributable will appear in its own subsection of the stockholders' equity c. Additional Paid-in Capital appears under the sub-section paid-in capital d. Dividends in Arrears will appear as a restriction of retained earningsC
Paid-in capital in excess of stated value would appear on a balance sheet under the category a. capital stock b. retained earnings c. additional paid-in capital d. contra to stockholders' equityC
Two classifications appearing in the paid-in capital section of the balance sheet are a. preferred stock and common stock b. paid-in capital and retained earnings c. capital stock and additional paid-in capital d. capital stock and treasury stockC
All of the following are normally found in a corporation's stockholders' equity section except a. dividends in arrears b. common stock c. paid-in capital d. retained earningsA
Information that is not generally reported for each class of stock on the balance sheet is a. the market value b. the par value c. shares authorized d. shares issuedA
In published annual reports a. subclassifications within the stockholders' equity section are routinely reported in detail b. capital surplus is used in place of retained earnings c. the individual sources of additional paid-in capital are often combined d. retained earnings is often not shown separatelyC
The payout ratio is computed by dividing a. total cash dividends paid by retained earnings b. dividends paid per share by net income c. total cash dividends paid by net income d. dividends paid per share by year-end stock priceC
The return on common stockholders' equity is computed by dividing net income a. by ending common stockholders' equity b. by average common stockholders' equity c. less preferred dividends by ending common stockholders' equity d. less preferred dividends by average common stockholders' equityD
Which of the following statements is true regarding corporate performance ratios? a. A high payout ratio may indicate that a company is retaining earnings for future growth investments b. As a company grows larger, it is easy to sustain a high return on common stockholder's equity c. Return on common stockholder's equity is often higher under bond financing rather than common stock financing d. Companies low growth rates are characterized by low payout ratiosC
John Jones Company has 20,000 shares of $100 par value common stock. Assuming that the proper journal entry was made to record a 5% common stock dividend on the declaration date when the market value of the stock was $135, which of the following accounts would be debited when the stock dividend is distributed? a. Retained Earnings b. Dividends Payable c. Common Stock Dividends Distributable d. Paid-in Capital in Excess of Par ValueC
If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is a. Common Stock Dividends Distributable b. Common Stock c. Paid-in Capital in Excess of Par d. Stock DividendsD
Which one of the following events would not require a journal entry on a corporation's books? a. 2-for-1 stock split b. 100% stock dividend c. 2% stock dividend d. $1 per share cash dividendA
The declaration and distribution of a stock dividend will a. increase total stockholders' equity b. increase total assets c. decrease total assets d. have no effect on total assetsD
The declaration of a small stock dividend will a. increase paid-in capital b. change the total of stockholders' equity c. increase total liabilities d. increase total assetsA
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Asked: 2 years ago

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