Question 1

IFRS uses each of the following terms to describe retained earnings except

Accepted Answer

A)  accumulated profit or loss.
B)  retained earnings.
C)  retained profits.
D)  share earnings.

Question 2

Marion, Inc. has 5,000 shares of 5%, $100 par value, noncumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2015. There were no dividends declared in 2014. The board of directors declares and pays a $65,000 dividend in 2015. What is the amount of dividends received by the common stockholders in 2015?

Accepted Answer

A)  $0
B)  $25,000
C)  $65,000
D)  $40,000

Question 3

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

Accepted Answer

A)  Stock Dividends for $210,000.
B)  Paid-in Capital in Excess of Par for $630,000.
C)  Common Stock for $210,000.
D)  Common Stock Dividends Distributable for $840,000.

Question 4

Two classifications appearing in the paid-in capital section of the balance sheet are

Accepted Answer

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 stock.

Question 5

Each of the following decreases retained earnings except a

Accepted Answer

A)  cash dividend.
B)  liquidating dividend.
C)  stock dividend.
D)  All of these decrease retained earnings.

Question 6

A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends on the date of record.

Accepted Answer

A) True 
 B)False

Question 7

The date a cash dividend becomes a binding legal obligation to a corporation is the

Accepted Answer

A)  declaration date.
B)  earnings date.
C)  payment date.
D)  record date.

Question 8

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 9

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 10

Previously issued financial statements with errors are required to be restated under

Accepted Answer

A)  GAAP only.
B)  IFRS only.
C)  Both GAAP and IFRS.
D)  Neither GAAP or IFRS.

Question 11

Book value per share of common stock is the same amount as the market value per share.

Accepted Answer

A) True 
 B)False

Question 12

The par value of stock issued for noncash assets is never a factor in determining the cost of the assets received.

Accepted Answer

A) True 
 B)False

Question 13

Legal capital per share cannot be equal to the

Accepted Answer

A)  par value per share of par value stock.
B)  total proceeds from the sale of par value stock above par value.
C)  stated value per share of no-par value stock.
D)  total proceeds from the sale of no-par value stock.

Question 14

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 15

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 16

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Accepted Answer

A) True 
 B)False

Question 17

If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

Accepted Answer

A) True 
 B)False

Question 18

Which one of the following is a privately held corporation?

Accepted Answer

A)  Intel
B)  General Electric
C)  Caterpillar Inc.
D)  Cargill Inc.

Question 19

Retained earnings represents the amount of cash available for dividends.

Accepted Answer

A) True 
 B)False

Question 20

The per share amount normally assigned by the board of directors to a small 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.

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

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

Correct Answer
verified

Book value per share of common stock is the same amount as the market value per share.

Correct Answer
verified

The par value of stock issued for noncash assets is never a factor in determining the cost of the assets received.

Correct Answer
verified

Correct Answer
verified

The par value of a stock

Correct Answer
verified

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

Correct Answer
verified

If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

Correct Answer
verified

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

Correct Answer
verified

Each of the following decreases retained earnings except a

Correct Answer
verified

IFRS uses each of the following terms to describe retained earnings except

Correct Answer
verified

A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends on the date of record.

Correct Answer
verified

Legal capital per share cannot be equal to the

Correct Answer
verified

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

Correct Answer
verified

Retained earnings represents the amount of cash available for dividends.

Correct Answer
verified

The date a cash dividend becomes a binding legal obligation to a corporation is the

Correct Answer
verified

Two classifications appearing in the paid-in capital section of the balance sheet are

Correct Answer
verified

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Correct Answer
verified

Previously issued financial statements with errors are required to be restated under

Correct Answer
verified

Which one of the following is a privately held corporation?

Correct Answer
verified

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

Correct Answer
verified

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

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

Correct AnswerverifiedShow Answer

Book value per share of common stock is the same amount as the market value per share.

Correct AnswerverifiedShow Answer

The par value of stock issued for noncash assets is never a factor in determining the cost of the assets received.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The par value of a stock

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Each of the following decreases retained earnings except a

Correct AnswerverifiedShow Answer

IFRS uses each of the following terms to describe retained earnings except

Correct AnswerverifiedShow Answer

A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends on the date of record.

Correct AnswerverifiedShow Answer

Legal capital per share cannot be equal to the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Retained earnings represents the amount of cash available for dividends.

Correct AnswerverifiedShow Answer

The date a cash dividend becomes a binding legal obligation to a corporation is the

Correct AnswerverifiedShow Answer

Two classifications appearing in the paid-in capital section of the balance sheet are

Correct AnswerverifiedShow Answer

The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.

Correct AnswerverifiedShow Answer

Previously issued financial statements with errors are required to be restated under

Correct AnswerverifiedShow Answer

Which one of the following is a privately held corporation?

Correct AnswerverifiedShow Answer

Cloud Manufacturing declared a 10% stock dividend when it had 700,000 shares of $3 par value common stock outstanding. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

Correct AnswerverifiedShow Answer

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