Question 1

The number of shares of issued stock equals

Accepted Answer

A)  unissued shares minus outstanding shares.
B)  outstanding shares plus treasury shares.
C)  authorized shares minus treasury shares.
D)  outstanding shares plus authorized shares.E) A) and B)
F) A) and C)

Question 2

Racer Corporation's December 31, 2017 balance sheet showed the following:  Racer declared and paid a $100,000 cash dividend on December 15, 2017. If the company's dividends in arrears prior to that date were $30,000, Racer's common stockholders received

Accepted Answer

A)  $70,000.
B)  $60,000.
C)  $40,000.
D)  no dividend.E) A) and D)
F) All of the above

Question 3

Which one of the following events would not require a journal entry on a corporation's books?

Accepted Answer

A)  2-for-1 stock split.
B)  100% stock dividend.
C)  2% stock dividend.
D)  $1 per share cash dividend.E) A) and D)
F) A) and C)

Question 4

Dividends in arrears on cumulative preferred stock

Accepted Answer

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 statements.E) B) and D)
F) B) and C)

Question 5

Which of the following statements is true regarding corporate performance ratios?

Accepted Answer

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)  Low growth rates are characterized by low payout ratios.E) A) and B)
F) C) and D)

Question 6

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 7

The following information pertains to Marsh Company. Assume that all balance sheet amounts represent average balance figures.   Total asset $400,000 Stockholders’ equity-common 200,000 Total stockholders’ equity 280,000 Sales revenue 120,000 Net income 30,000 Number of shares of common stock 8,000 Common dividends 6,000 Preferred dividends 4,000\begin{array} { l r } 	ext { Total asset } & \$ 400,000 \	ext { Stockholders&#x27; equity-common } & 200,000 \	ext { Total stockholders&#x27; equity } & 280,000 \	ext { Sales revenue } & 120,000 \	ext { Net income } & 30,000 \	ext { Number of shares of common stock } & 8,000 \	ext { Common dividends } & 6,000 \	ext { Preferred dividends } & 4,000\end{array} Total asset  Stockholders’ equity-common  Total stockholders’ equity  Sales revenue  Net income  Number of shares of common stock  Common dividends  Preferred dividends ​$400,000200,000280,000120,00030,0008,0006,0004,000​  What is Marsh's payout ratio?

Accepted Answer

A)  33.3%.
B)  20.0%.
C)  13.3%.
D)  5.0%. E) B) and D)
F) None of the above

Question 8

Retained earnings that are restricted are unavailable for dividends.

Accepted Answer

A) True 
 B)False

Question 9

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 Value is debited if it is a small stock dividend.
D)  No entry is necessary if it is a large stock dividend.E) A) and D)
F) C) and D)

Question 10

A corporation records a dividend-related liability

Accepted Answer

A)  on the record date.
B)  on the payment date.
C)  when dividends are in arrears.
D)  on the declaration date.E) None of the above
F) B) and C)

Question 11

Stock dividends and stock splits have the following effects on retained earnings:

Accepted Answer

The answer of Stock dividends and stock splits have the...

Question 12

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?

Accepted Answer

A)  Market value of the stock.
B)  Market value of the assets.
C)  Par value of the stock.
D)  The more clearly determinable market value.E) A) and B)
F) B) and D)

Question 13

A disadvantage of the corporate form of business is

Accepted Answer

A)  its status as a separate legal entity.
B)  continuous existence.
C)  government regulation.
D)  ease of transfer of ownership.E) C) and D)
F) A) and C)

Question 14

Of the four dividends types, the two most common types in practice are

Accepted Answer

A)  cash and scrip.
B)  cash and property.
C)  cash and stock.
D)  property and stock.E) None of the above
F) B) and D)

Question 15

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, 2017. The dividend is to be paid on August 15, 2017, to stockholders of record on July 31, 2017. The correct entry to be recorded on July 15, 2017, will include a

Accepted Answer

A)  debit to Dividends Payable.
B)  debit to Cash Dividends.
C)  credit to Cash.
D)  credit to Cash Dividends.E) All of the above
F) C) and D)

Question 16

Information that is not generally reported for each class of stock on the balance sheet is

Accepted Answer

A)  the market value.
B)  the par value.
C)  shares authorized.
D)  shares issued.E) B) and C)
F) A) and B)

Question 17

Dawson Company issued 800 shares of no-par common stock for $7,200. Which of the following journal entries would be made if the stock has stated value of $2 per share?

Accepted Answer

The answer of Dawson Company issued 800 shares of no-par...

Question 18

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Accepted Answer

A) True 
 B)False

Question 19

If common stock is issued for an amount greater than par value, the excess should be credited to

Accepted Answer

A)  Cash.
B)  Retained Earnings.
C)  Paid-in Capital in Excess of Par Value.
D)  Legal Capital.E) None of the above
F) A) and D)

Question 20

On the dividend record date

Accepted Answer

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

Exam 10: Reporting and Analyzing Stockholders Equity

If common stock is issued for an amount greater than par value, the excess should be credited to

Correct Answer
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Dawson Company issued 800 shares of no-par common stock for $7,200. Which of the following journal entries would be made if the stock has stated value of $2 per share?

Correct Answer
verified

Of the four dividends types, the two most common types in practice are

Correct Answer
verified

Which one of the following events would not require a journal entry on a corporation's books?

Correct Answer
verified

Information that is not generally reported for each class of stock on the balance sheet is

Correct Answer
verified

A disadvantage of the corporate form of business is

Correct Answer
verified

Retained earnings that are restricted are unavailable for dividends.

Correct Answer
verified

Which of the following statements is true regarding corporate performance ratios?

Correct Answer
verified

Racer Corporation's December 31, 2017 balance sheet showed the following: Racer declared and paid a $100,000 cash dividend on December 15, 2017. If the company's dividends in arrears prior to that date were $30,000, Racer's common stockholders received

Correct Answer
verified

Stock dividends and stock splits have the following effects on retained earnings:

Correct Answer
verified

A corporation records a dividend-related liability

Correct Answer
verified

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Correct Answer
verified

When stock dividends are distributed,

Correct Answer
verified

Dividends in arrears on cumulative preferred stock

Correct Answer
verified

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, 2017. The dividend is to be paid on August 15, 2017, to stockholders of record on July 31, 2017. The correct entry to be recorded on July 15, 2017, will include a

Correct Answer
verified

Correct Answer
verified

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Correct Answer
verified

On the dividend record date

Correct Answer
verified

The number of shares of issued stock equals

Correct Answer
verified

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?

Correct Answer
verified

Exam 10: Reporting and Analyzing Stockholders Equity

If common stock is issued for an amount greater than par value, the excess should be credited to

Correct AnswerverifiedShow Answer

Dawson Company issued 800 shares of no-par common stock for $7,200. Which of the following journal entries would be made if the stock has stated value of $2 per share?

Correct AnswerverifiedShow Answer

Of the four dividends types, the two most common types in practice are

Correct AnswerverifiedShow Answer

Which one of the following events would not require a journal entry on a corporation's books?

Correct AnswerverifiedShow Answer

Information that is not generally reported for each class of stock on the balance sheet is

Correct AnswerverifiedShow Answer

A disadvantage of the corporate form of business is

Correct AnswerverifiedShow Answer

Retained earnings that are restricted are unavailable for dividends.

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding corporate performance ratios?

Correct AnswerverifiedShow Answer

Racer Corporation's December 31, 2017 balance sheet showed the following: Racer declared and paid a $100,000 cash dividend on December 15, 2017. If the company's dividends in arrears prior to that date were $30,000, Racer's common stockholders received

Correct AnswerverifiedShow Answer

Stock dividends and stock splits have the following effects on retained earnings:

Correct AnswerverifiedShow Answer

A corporation records a dividend-related liability

Correct AnswerverifiedShow Answer

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Correct AnswerverifiedShow Answer

When stock dividends are distributed,

Correct AnswerverifiedShow Answer

Dividends in arrears on cumulative preferred stock

Correct AnswerverifiedShow Answer

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, 2017. The dividend is to be paid on August 15, 2017, to stockholders of record on July 31, 2017. The correct entry to be recorded on July 15, 2017, will include a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity.

Correct AnswerverifiedShow Answer

On the dividend record date

Correct AnswerverifiedShow Answer

The number of shares of issued stock equals

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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