Question 1

A stock dividend results in an increase in paid-in capital in the accounts.

Accepted Answer

A) True 
 B)False

Question 2

Accepted Answer

Ralston Company is authorized to issue 10,000 shares of 8%, $100 par value preferred stock and 500,000 shares of no-par common stock with a stated value of $1 per share.If Ralston issues 9,000 shares of common stock to pay its recent attorney's bill of $37,500 for legal services rendered in the organization of the corporation, which of the following would 1.  ) undefined
 ) undefined

Question 3

In the financial statements, organization costs appear

Accepted Answer

A)  immediately below Retained Earnings in the stockholders' equity section.
B)  in the income statement.
C)  as part of paid-in capital in the stockholders' equity section.
D)  as an intangible asset.E) All of the above
F) B) and C)

Question 4

Car and Auto Sisters had retained earnings of $18,000 on the balance sheet but disclosed in the footnotes that $3,000 of retained earnings was restricted for plant expansion and $1,000 was restricted for bond repayments.Cash of $2,000 had been set aside for the plant expansion.How much of retained earnings is available for dividends?

Accepted Answer

A)  $14,000
B)  $15,000
C)  $18,000
D)  $12,000E) All of the above
F) A) and B)

Question 5

On January 1, Soft Corporation had 80,000 shares of $10 par value common stock outstanding.On June 17, the company declared a 10% stock dividend to stockholders of record on June 20.The market value of the stock was $15 on June 17.The stock was distributed on June 30.The entry to record the transaction of June 30 would include a

Accepted Answer

A)  credit to Common Stock for $80,000.
B)  debit to Common Stock Dividends Distributable for $120,000.
C)  credit to Paid-in Capital in Excess of Par for $40,000.
D)  debit to Stock Dividends for $40,000.E) A) and B)
F) B) and D)

Question 6

Brown Company has 1,000 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2021.No dividends have been paid on this stock for 2020 or 2021.Dividends in arrears at December 31, 2021 total

Accepted Answer

A)  $0.
B)  $500.
C)  $5,000.
D)  $10,000.E) C) and D)
F) A) and B)

Question 7

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 8

The following data is available for Blaine Corporation at December 31, 2021:  Based on the data, how many shares of common stock are outstanding?

Accepted Answer

A)  30,000
B)  25,000
C)  29,940
D)  24,940E) A) and B)
F) A) and C)

Question 9

A stockholder has the right to vote in the election of the board of directors.

Accepted Answer

A) True 
 B)False

Question 10

Treasury Stock is a(n)

Accepted Answer

A)  contra asset account.
B)  retained earnings account.
C)  asset account.
D)  contra stockholders' equity account.E) C) and D)
F) All of the above

Question 11

A net loss

Accepted Answer

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 sheet.E) A) and B)
F) A) and C)

Question 12

The chief accounting officer in a corporation is the

Accepted Answer

A)  treasurer.
B)  president.
C)  controller.
D)  vice-president of finance.E) B) and D)
F) None of the above

Question 13

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 14

On January 1, Collins Corporation had 800,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15 per share.As a result of this event,

Accepted Answer

A)  Collins' Paid-in Capital in Excess of Par account increased $400,000.
B)  Collins' total stockholders' equity was unaffected.
C)  Collins' Stock Dividends account increased $1,200,000.
D)  All of these answers are correct.E) A) and B)
F) A) and C)

Question 15

Treasury stock should be reported in the financial statements of a corporation as a(n)

Accepted Answer

A)  investment.
B)  liability.
C)  deduction from total paid-in capital.
D)  deduction from total paid-in capital and retained earnings.E) B) and C)
F) A) and D)

Question 16

New Corp.issues 2,000 shares of $10 par value common stock at $16 per share.When the transaction is recorded, credits are made to

Accepted Answer

A)  Common Stock $20,000 and Paid-in Capital in Excess of Stated Value $12,000.
B)  Common Stock $32,000.
C)  Common Stock $20,000 and Paid-in Capital in Excess of Par $12,000.
D)  Common Stock $20,000 and Retained Earnings $12,000.E) All of the above
F) B) and D)

Question 17

The two ways that a corporation can be classified by purpose are

Accepted Answer

A)  general and limited.
B)  profit and not-for-profit.
C)  state and federal.
D)  publicly held and privately held.E) B) and C)
F) B) and D)

Question 18

A credit balance in retained earnings represents

Accepted Answer

A)  the amount of cash retained in the business.
B)  a claim on specific assets of the corporation.
C)  a claim on the aggregate assets of the corporation.
D)  the amount of stockholders' equity exempted from the stockholders' claim on total assets.E) B) and C)
F) All of the above

Question 19

Accepted Answer

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:  ) undefined
 ) undefined

Question 20

The Northern Corporation issues 7,000 shares of $100 par value preferred stock for cash at $120 per share.The entry to record the transaction will consist of a debit to Cash for $840,000 and a credit or credits to

Accepted Answer

A)  Preferred Stock for $840,000.
B)  Paid-in Capital from Preferred Stock for $840,000.
C)  Preferred Stock for $700,000 and Retained Earnings for $140,000.
D)  Preferred Stock for $700,000 and Paid-in Capital in Excess of Par-Preferred Stock for $140,000.E) B) and D)
F) B) and C)

Exam 11: Corporations: Organisations, Stock Transactions and Stockholders Equity

A stock dividend results in an increase in paid-in capital in the accounts.

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

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

New Corp.issues 2,000 shares of $10 par value common stock at $16 per share.When the transaction is recorded, credits are made to

Correct Answer
verified

Treasury Stock is a(n)

Correct Answer
verified

Correct Answer
verified

A net loss

Correct Answer
verified

On January 1, Collins Corporation had 800,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15 per share.As a result of this event,

Correct Answer
verified

Treasury stock should be reported in the financial statements of a corporation as a(n)

Correct Answer
verified

The following data is available for Blaine Corporation at December 31, 2021: Based on the data, how many shares of common stock are outstanding?

Correct Answer
verified

A stockholder has the right to vote in the election of the board of directors.

Correct Answer
verified

A credit balance in retained earnings represents

Correct Answer
verified

The Northern Corporation issues 7,000 shares of $100 par value preferred stock for cash at $120 per share.The entry to record the transaction will consist of a debit to Cash for $840,000 and a credit or credits to

Correct Answer
verified

The two ways that a corporation can be classified by purpose are

Correct Answer
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The chief accounting officer in a corporation is the

Correct Answer
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Brown Company has 1,000 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2021.No dividends have been paid on this stock for 2020 or 2021.Dividends in arrears at December 31, 2021 total

Correct Answer
verified

In the financial statements, organization costs appear

Correct Answer
verified

Correct Answer
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Correct Answer
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Exam 11: Corporations: Organisations, Stock Transactions and Stockholders Equity

A stock dividend results in an increase in paid-in capital in the accounts.

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

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

New Corp.issues 2,000 shares of $10 par value common stock at $16 per share.When the transaction is recorded, credits are made to

Correct AnswerverifiedShow Answer

Treasury Stock is a(n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A net loss

Correct AnswerverifiedShow Answer

On January 1, Collins Corporation had 800,000 shares of $10 par value common stock outstanding.On March 31, the company declared a 10% stock dividend.The market value of the stock was $15 per share.As a result of this event,

Correct AnswerverifiedShow Answer

Treasury stock should be reported in the financial statements of a corporation as a(n)

Correct AnswerverifiedShow Answer

The following data is available for Blaine Corporation at December 31, 2021: Based on the data, how many shares of common stock are outstanding?

Correct AnswerverifiedShow Answer

A stockholder has the right to vote in the election of the board of directors.

Correct AnswerverifiedShow Answer

A credit balance in retained earnings represents

Correct AnswerverifiedShow Answer

The Northern Corporation issues 7,000 shares of $100 par value preferred stock for cash at $120 per share.The entry to record the transaction will consist of a debit to Cash for $840,000 and a credit or credits to

Correct AnswerverifiedShow Answer

The two ways that a corporation can be classified by purpose are

Correct AnswerverifiedShow Answer

The chief accounting officer in a corporation is the

Correct AnswerverifiedShow Answer

Brown Company has 1,000 shares of 5%, $100 par cumulative preferred stock outstanding at December 31, 2021.No dividends have been paid on this stock for 2020 or 2021.Dividends in arrears at December 31, 2021 total

Correct AnswerverifiedShow Answer

In the financial statements, organization costs appear

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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