Question 1

Using the following accounts:
  Indicate the account(s)to be debited and credited to record the following transactions.
-Declared a cash dividend.
Debit ________ & ________ & ________ Credit ________ & ________ & ________

Accepted Answer

The answer of Using the following accounts:
  Indicate the...

Question 2

The date of record for cash dividends is:

Accepted Answer

A)  the date the board of directors pays a dividend.
B)  the date established by the board of directors that determines who will receive dividends.
C)  the date that creates a liability for the company.
D)  None of these answers are correct. B

Question 3

A prior period adjustment is corrected to the ending balance of Retained Earnings.

Accepted Answer

A) True 
 B)False

Question 4

Treasury stock was purchased and recorded as an asset. This error would cause:

Accepted Answer

A)  the period end assets to be understated.
B)  the period end liabilities to be overstated.
C)  the period end stockholders' equity to be overstated.
D)  None of the above is correct.

Question 5

To record the purchase of treasury stock:

Accepted Answer

A)  debit Treasury Stock-Common (par value) ; credit Cash (same) .
B)  debit Treasury Stock-Common (purchase price) ; credit Cash (same) .
C)  debit Treasury Stock-Common (par value) ; debit any difference to Paid-in Capital; credit Cash (purchase price) .
D)  None of these answers are correct.

Question 6

Which of the following in not true about retained earnings?

Accepted Answer

A)  Declaring a stock split will have no effect on retained earnings.
B)  Appropriating retained earnings will have no effect on total stockholders' equity.
C)  Distributing stock dividends will have no effect on retained earnings.
D)  Declaring cash dividends will increase retained earnings.

Question 7

Prepare the following stock dividend journal entries for Tamera, Inc.

Accepted Answer

The answer of Prepare the following stock dividend journal entries...

Question 8

An exchange of one share of an old issue of stock for a multiple number of shares of a new issue of stock with reduced par value is known as a:

Accepted Answer

A)  property dividend.
B)  stock dividend.
C)  stock split.
D)  liquidating dividend.

Question 9

What are the annual dividends on preferred stock, $20 par, 2,000 shares authorized, 700 shares issued, and a dividend rate of 5%?

Accepted Answer

A)  $200
B)  $20
C)  $700
D)  $70

Question 10

Book value per share is found by dividing total assets by total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 11

An appropriation to retained earnings reduces total assets.

Accepted Answer

A) True 
 B)False

Question 12

The retained earnings section after a two-for-one stock split will:

Accepted Answer

A)  be one-half as much after the split.
B)  be double as much after the split.
C)  not change after the split.
D)  cannot be determined from the information given.

Question 13

When treasury stock is purchased:

Accepted Answer

A)  issued shares increase.
B)  outstanding shares decrease.
C)  authorized shares decrease.
D)  None of these answers are correct.

Question 14

The board of Bogswell, Inc. declared a $2 per share cash dividend on common stock. The corporation has 4,000 shares of common stock outstanding. The entry required to distribute the dividend is:

Accepted Answer

A)  debit Cash; credit Common Dividends Payable.
B)  debit Common Dividends Payable; credit Cash.
C)  debit Common Dividends Payable; credit Retained Earnings.
D)  debit Cash Dividends; credit Common Dividends Payable.

Question 15

Par value is the price per share a corporation pays to holders of stock when it is redeemed.

Accepted Answer

A) True 
 B)False

Question 16

Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding.
Journalize the following Baxter transactions for 20XX:

Accepted Answer

The answer of Baxter Corporation has 1,000 shares of $5...

Question 17

When treasury stock is sold, the Paid-in Capital in Excess of Par is returned.

Accepted Answer

A) True 
 B)False

Question 18

Declaration of a cash dividend was recorded by debiting Operations Expense and crediting Cash. This error would cause:

Accepted Answer

A)  the period end assets to be overstated.
B)  the period end liabilities to be overstated.
C)  the period end stockholders' equity to be understated.
D)  None of the above are correct. D

Question 19

Common Stock Dividend Distributable is a liability account.

Accepted Answer

A) True 
 B)False  False

Question 20

Ariel Investigations has total paid-in capital of $90,000 and retained earnings of $60,000. It has 200 shares of $100 par value common stock outstanding. The book value of each share of common stock is:

Accepted Answer

A)  $750.
B)  $450.
C)  $300.
D)  $600.

Exam 19: Corporations: Stock Values, Dividends, Treasury Stocks, and Retained Earnings

Using the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Declared a cash dividend. Debit ________ & ________ & ________ Credit ________ & ________ & ________

Correct AnswerverifiedShow Answer

The date of record for cash dividends is:

Correct AnswerverifiedB

A prior period adjustment is corrected to the ending balance of Retained Earnings.

Correct AnswerverifiedShow Answer

Treasury stock was purchased and recorded as an asset. This error would cause:

Correct AnswerverifiedShow Answer

To record the purchase of treasury stock:

Correct AnswerverifiedShow Answer

Which of the following in not true about retained earnings?

Correct AnswerverifiedShow Answer

Prepare the following stock dividend journal entries for Tamera, Inc.

Correct AnswerverifiedShow Answer

An exchange of one share of an old issue of stock for a multiple number of shares of a new issue of stock with reduced par value is known as a:

Correct AnswerverifiedShow Answer

What are the annual dividends on preferred stock, $20 par, 2,000 shares authorized, 700 shares issued, and a dividend rate of 5%?

Correct AnswerverifiedShow Answer

Book value per share is found by dividing total assets by total stockholders' equity.

Correct AnswerverifiedShow Answer

An appropriation to retained earnings reduces total assets.

Correct AnswerverifiedShow Answer

The retained earnings section after a two-for-one stock split will:

Correct AnswerverifiedShow Answer

When treasury stock is purchased:

Correct AnswerverifiedShow Answer

The board of Bogswell, Inc. declared a $2 per share cash dividend on common stock. The corporation has 4,000 shares of common stock outstanding. The entry required to distribute the dividend is:

Correct AnswerverifiedShow Answer

Par value is the price per share a corporation pays to holders of stock when it is redeemed.

Correct AnswerverifiedShow Answer

Baxter Corporation has 1,000 shares of $5 par value common stock issued and outstanding. Journalize the following Baxter transactions for 20XX:

Correct AnswerverifiedShow Answer

When treasury stock is sold, the Paid-in Capital in Excess of Par is returned.

Correct AnswerverifiedShow Answer

Declaration of a cash dividend was recorded by debiting Operations Expense and crediting Cash. This error would cause:

Correct AnswerverifiedD

Common Stock Dividend Distributable is a liability account.

Correct AnswerverifiedFalse

Ariel Investigations has total paid-in capital of $90,000 and retained earnings of $60,000. It has 200 shares of $100 par value common stock outstanding. The book value of each share of common stock is:

Correct AnswerverifiedShow Answer

Using the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Declared a cash dividend. Debit & & Credit & &

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B

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D

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False

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