Question 1

The per share amount normally assigned by the board of directors to a large stock dividend is

Accepted Answer

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)   zero.

Question 2

In the stockholders' equity section of the balance sheet, the classification of capital stock consists of

Accepted Answer

A)   additional paid-in capital and common stock.
B)   common stock and treasury stock.
C)   common stock, preferred stock, and treasury stock.
D)   common stock and preferred stock.

Question 3

Many companies prepare a stockholders' equity statement instead of presenting a detailed stockholders' equity section in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

The par value of a stock

Accepted Answer

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 stock.

Question 5

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 6

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Accepted Answer

A) True 
 B)False

Question 7

Additional paid-in capital includes all of the following except

Accepted Answer

A)   paid-in capital from treasury stock.
B)   paid-in capital in excess of par.
C)   paid-in capital in excess of stated value.
D)   paid-in capital in excess of book value.

Question 8

If preferred stock is cumulative, the

Accepted Answer

A)   preferred dividends not declared in a given year are called dividends in arrears.
B)   preferred stockholders and the common stockholders receive equal dividends.
C)   preferred stockholders and the common stockholders receive the same total dollar amount of dividends.
D)   common stockholders will share in the preferred dividends.

Question 9

Realistic Corporation's December 31, 2015 balance sheet showed the following: 8% preferred stock, $20 par value, cumulative, 20,000 shares   authorized; 10,000 shares issued $200,000 Common stock, $10 par value, 2,000,000 shares authorized;  1,950,000 shares issued, 1,930,000 shares outstanding 19,500,000 Paid-in capital in excess of par-preferred stock 60,000 Paid-in capital in excess of par-common stock 24,000,000 Retained earnings 7,650,000 Treasury stock (20,000 shares)  630,000\begin{array} { l r } 	ext { authorized; 10,000 shares issued } & \$ 200,000 \	ext { Common stock, \$10 par value, 2,000,000 shares authorized; } & \	ext { 1,950,000 shares issued, 1,930,000 shares outstanding } & 19,500,000 \	ext { Paid-in capital in excess of par-preferred stock } & 60,000 \	ext { Paid-in capital in excess of par-common stock } & 24,000,000 \	ext { Retained earnings } & 7,650,000 \	ext { Treasury stock (20,000 shares)  } & 630,000\end{array} authorized; 10,000 shares issued  Common stock, $10 par value, 2,000,000 shares authorized;  1,950,000 shares issued, 1,930,000 shares outstanding  Paid-in capital in excess of par-preferred stock  Paid-in capital in excess of par-common stock  Retained earnings  Treasury stock (20,000 shares)  ​$200,00019,500,00060,00024,000,0007,650,000630,000​  Realistic's total paid-in capital was

Accepted Answer

A)   $43,760,000.
B)   $44,390,000.
C)   $43,130,000.
D)   $24,060,000.

Question 10

Ramos Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a

Accepted Answer

A)   credit to Gain on Sale of Treasury Stock for $14,000.
B)   credit to Paid-in Capital from Treasury Stock for $4,000.
C)   debit to Paid-in Capital in Excess of Par for $4,000.
D)   credit to Treasury Stock for $18,000.

Question 11

As soon as a corporation is authorized to issue stock, an accounting journal entry should be made recording the total value of the shares authorized.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements about dividends is not accurate?

Accepted Answer

A)   Many companies declare and pay cash quarterly dividends.
B)   Low dividends may mean high stock returns.
C)   The board of directors is obligated to declare dividends.
D)   A legal dividend may not be a feasible one.

Question 13

Which of the following is an incorrect statement about a corporation?

Accepted Answer

A)   A corporation is an entity separate and distinct from its owners.
B)   Creditors ordinarily have recourse only to corporate assets in satisfaction of their claims.
C)   A corporation may be formed in writing, orally, or implied.
D)   A corporation is subject to numerous state and federal regulations.

Question 14

Dividends are predominantly paid in

Accepted Answer

A)   earnings.
B)   property.
C)   cash.
D)   stock.

Question 15

In the stockholders' equity section of the balance sheet,

Accepted Answer

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 stock- holders' equity.
C)   Additional Paid-in Capital appears under the subsection Paid-in Capital.
D)   Dividends in arrears will appear as a restriction of Retained Earnings.

Question 16

A 3-for-1 common stock split will increase total stockholders' equity but reduce the par or stated value per share of common stock.

Accepted Answer

A) True 
 B)False

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

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 19

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections: $\begin{array}{llcc}\underline{\text { Total Assets }}& \underline{\text { Total Liabilities } }&\underline{\text { Total Stockholders' Equity} }\end{array}$
A)$\begin{array}{ccc}
\text { Increase } &&& \text { Decrease } &&&&& \text { No change } \\end{array}$
B)$\begin{array}{ccc}\text { No change } && \text { Increase } &&&&& \text { Decrease } \\end{array}$
C)$\begin{array}{ccc}\text { Decrease } &&& \text { Increase } &&&&& \text { Decrease } \\end{array}$
D)$\begin{array}{ccc}\text { Decrease } &&& \text { No change } &&&& \text { Increase }
\end{array}$

Accepted Answer

The answer of Indicate the respective effects of the declaration...

Question 20

When stock dividends are distributed,

Accepted Answer

A)   Common Stock Dividends Distributable is decreased.
B)   Retained Earnings is decreased.
C)   Paid-in Capital in Excess of Par is debited if it is a small stock dividend.
D)   no entry is necessary if it is a large stock dividend.

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

In the stockholders' equity section of the balance sheet,

Correct Answer
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Correct Answer
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A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Correct Answer
verified

Correct Answer
verified

As soon as a corporation is authorized to issue stock, an accounting journal entry should be made recording the total value of the shares authorized.

Correct Answer
verified

In the stockholders' equity section of the balance sheet, the classification of capital stock consists of

Correct Answer
verified

Dividends are predominantly paid in

Correct Answer
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If preferred stock is cumulative, the

Correct Answer
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When stock dividends are distributed,

Correct Answer
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Each of the following is reported for common stock except the

Correct Answer
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A 3-for-1 common stock split will increase total stockholders' equity but reduce the par or stated value per share of common stock.

Correct Answer
verified

The per share amount normally assigned by the board of directors to a large stock dividend is

Correct Answer
verified

The par value of a stock

Correct Answer
verified

Additional paid-in capital includes all of the following except

Correct Answer
verified

Which of the following is an incorrect statement about a corporation?

Correct Answer
verified

Many companies prepare a stockholders' equity statement instead of presenting a detailed stockholders' equity section in the balance sheet.

Correct Answer
verified

Correct Answer
verified

Which of the following statements about dividends is not accurate?

Correct Answer
verified

Ramos Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a

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

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

In the stockholders' equity section of the balance sheet,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As soon as a corporation is authorized to issue stock, an accounting journal entry should be made recording the total value of the shares authorized.

Correct AnswerverifiedShow Answer

In the stockholders' equity section of the balance sheet, the classification of capital stock consists of

Correct AnswerverifiedShow Answer

Dividends are predominantly paid in

Correct AnswerverifiedShow Answer

If preferred stock is cumulative, the

Correct AnswerverifiedShow Answer

When stock dividends are distributed,

Correct AnswerverifiedShow Answer

Each of the following is reported for common stock except the

Correct AnswerverifiedShow Answer

A 3-for-1 common stock split will increase total stockholders' equity but reduce the par or stated value per share of common stock.

Correct AnswerverifiedShow Answer

The per share amount normally assigned by the board of directors to a large stock dividend is

Correct AnswerverifiedShow Answer

The par value of a stock

Correct AnswerverifiedShow Answer

Additional paid-in capital includes all of the following except

Correct AnswerverifiedShow Answer

Which of the following is an incorrect statement about a corporation?

Correct AnswerverifiedShow Answer

Many companies prepare a stockholders' equity statement instead of presenting a detailed stockholders' equity section in the balance sheet.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements about dividends is not accurate?

Correct AnswerverifiedShow Answer

Ramos Corporation sold 400 shares of treasury stock for $45 per share. The cost for the shares was $35. The entry to record the sale will include a

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

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