Question 1

The Treasury Stock account should be considered an asset account.

Accepted Answer

A) True 
 B)False

Question 2

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding
What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Accepted Answer

A)   Retained earnings in the amount of $400,000 is transferred to the contributed capital accounts.
B)   Cash decreases $400,000.
C)   Additional Paid-in Capital increases $400,000.
D)   A stock split has no effect on total stockholders' equity.E) A) and D)
F) A) and C)

Question 3

When the owner of a sole proprietorship withdraws assets from the business for personal use

Accepted Answer

A)   it is treated like a noncash dividend.
B)   it is illegal because the assets belong to the separate entity, the proprietorship.
C)   it would be recorded as a loss by the proprietorship.
D)   it is recorded as a reduction of owner's equity.E) None of the above
F) A) and C)

Question 4

Which of the following statements regarding partnerships is true?

Accepted Answer

A)   Partnerships must register with the federal government.
B)   Partnerships pay taxes to the IRS.
C)   Partners must register with the state government.
D)   Partners must abide by the separate entity concept and keep their personal assets separate from the partnership assets.E) All of the above
F) B) and C)

Question 5

Authorized stock represents the

Accepted Answer

A)   maximum number of shares that can be issued.
B)   number of shares that have been sold.
C)   number of shares that are currently held by stockholders.
D)   number of shares that have been repurchased by the corporation.E) B) and C)
F) All of the above

Question 6

Select the statement on which each of the items provided below would be reported.
-Dividends for the period.

Accepted Answer

A)  Statement of retained earnings
B)  Statement of stockholders' equity
C)  Items that may require reporting on either statement
D)  Items not reported on either of the statementsE) B) and D)
F) C) and D)

Question 7

Which of the following is true concerning a sole proprietorship?

Accepted Answer

A)   It is a separate legal entity.
B)   It may have more than one class of stock outstanding.
C)   It is owned by one or more persons.
D)   The separate entity concept applies.E) A) and C)
F) A) and B)

Question 8

Use the incomplete stockholders' equity section of Wilmerding Company's balance sheet as of December 31, 2016, to answer the following question.   Common stock, $7 par, 100,000 shares authorized $700,000 Additional paid-in capital-common 160,000 Retained earnings ? Treasury stock (2,000 shares at cost)  (16,000)  Total stockholders’ equity 974,000\begin{array}{lr}	ext { Common stock, } \$ 7 	ext { par, } 100,000 	ext { shares authorized } & \$ 700,000 \	ext { Additional paid-in capital-common } & 160,000 \	ext { Retained earnings } & ? \	ext { Treasury stock }(2,000 	ext { shares at cost)  } & (16,000)  \	ext { Total stockholders&#x27; equity } & 974,000\end{array} Common stock, $7 par, 100,000 shares authorized  Additional paid-in capital-common  Retained earnings  Treasury stock (2,000 shares at cost)   Total stockholders’ equity ​$700,000160,000?(16,000) 974,000​  ? What is the amount of Wilmerding's retained earnings?

Accepted Answer

A)   $130,000
B)   $98,000
C)   $860,000
D)   $114,000 E) B) and C)
F) A) and B)

Question 9

The amount received for each share of stock in excess of par value is ______________________.

Accepted Answer

additional...

Question 10

Tropical Co.declared a cash dividend of $30,000.The entry includes a(n)

Accepted Answer

A)   decrease to Cash of $30,000.
B)   increase to Retained Earnings of $30,000.
C)   decrease to Retained Earnings of $30,000.
D)   decrease to Cash Dividend Payable of $30,000.E) None of the above
F) B) and C)

Question 11

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information, how many shares are outstanding at December 31?

Accepted Answer

A)   15,000
B)   18,000
C)   4,500
D)   3,000E) C) and D)
F) None of the above

Question 12

[APPENDIX] A partnership can be owned by one or more entities or individuals.

Accepted Answer

A) True 
 B)False

Question 13

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is reported as a financing activity?

Accepted Answer

A)   Declaration of dividends
B)   Sale of preferred stock
C)   Conversion of preferred stock to common stock
D)   Stock splitE) None of the above
F) C) and D)

Question 15

Prairie Charters reported the following information at December 31, 2016:   Common stock, $1 par, 500,000 shares authorized, 100,000 shares issued $100,000 Additional paid-in capital-Common 25,000 Retained earnings 75,000 Total stockholders’ equity $250,000\begin{array}{lr}	ext { Common stock, } \$ 1 	ext { par, } 500,000 	ext { shares authorized, } 100,000 	ext { shares issued } & \$ 100,000 \	ext { Additional paid-in capital-Common } & 25,000 \	ext { Retained earnings } & 75,000 \\quad 	ext { Total stockholders&#x27; equity } & \$ 250,000\end{array} Common stock, $1 par, 500,000 shares authorized, 100,000 shares issued  Additional paid-in capital-Common  Retained earnings  Total stockholders’ equity ​$100,00025,00075,000$250,000​  The average recorded value per share of common stock at December 31, 2016, is

Accepted Answer

A)   $1.00
B)   $1.75
C)   $1.25
D)   $2.50 E) A) and D)
F) None of the above

Question 16

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity.
-Which item would not be recorded until declared?

Accepted Answer

A)  Preferred stock issued by Carlton
B)  Amount received by Carlton in excess of par value when preferred stock was issued
C)  Dividends in arrears on Carlton preferred stock
D)  Cash dividend declared but unpaid on Carlton stock
E)  Stock dividend declared but unissued by CarltonF) Treasury stockG) Amount received in excess of cost when treasury stock is reissued by MJH) Retained earningsI) B) and C)
J) A) and F)

Question 17

Book value is a measure of the market value of the stock.

Accepted Answer

A) True 
 B)False

Question 18

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Accepted Answer

A)   increase Cash and increase Cash Dividend Payable.
B)   decrease Cash Dividend Payable and decrease Cash.
C)   decrease Retained Earnings and increase Cash Dividend Payable.
D)   decrease Cash Dividend Payable and increase Retained Earnings.E) A) and C)
F) B) and C)

Question 19

The statement of stockholders' equity

Accepted Answer

A)   is one of the required financial statements for the annual report, when changes have occurred in the stockholders' equity accounts.
B)   shows the changes in retained earnings for the period, which includes the increase or decrease as a result of net income or loss for the period, and dividends for the period.
C)   includes accounts, such as the retained earnings and common stock accounts, but not changes to the retained earnings account, since those items are reported on the statement of retained earnings.
D)   is used only if a corporation frequently issues common stock.E) A) and D)
F) B) and D)

Question 20

The participating feature of stock allows stockholders to sell stock back to the company.

Accepted Answer

A) True 
 B)False

Exam 11: Stockholders Equity

Book value is a measure of the market value of the stock.

Correct Answer
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The amount received for each share of stock in excess of par value is ______________________.

Correct Answer
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additional...
View Answer

Select the statement on which each of the items provided below would be reported. -Dividends for the period.

Correct Answer
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Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which item would not be recorded until declared?

Correct Answer
verified

Correct Answer
verified

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Correct Answer
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Which of the following is reported as a financing activity?

Correct Answer
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Authorized stock represents the

Correct Answer
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Correct Answer
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[APPENDIX] A partnership can be owned by one or more entities or individuals.

Correct Answer
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The Treasury Stock account should be considered an asset account.

Correct Answer
verified

When the owner of a sole proprietorship withdraws assets from the business for personal use

Correct Answer
verified

The participating feature of stock allows stockholders to sell stock back to the company.

Correct Answer
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The statement of stockholders' equity

Correct Answer
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If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

Correct Answer
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Which of the following statements regarding partnerships is true?

Correct Answer
verified

Tropical Co.declared a cash dividend of $30,000.The entry includes a(n)

Correct Answer
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Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Correct Answer
verified

Which of the following is true concerning a sole proprietorship?

Correct Answer
verified

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information, how many shares are outstanding at December 31?

Correct Answer
verified

Exam 11: Stockholders Equity

Book value is a measure of the market value of the stock.

Correct AnswerverifiedShow Answer

The amount received for each share of stock in excess of par value is ______________________.

Correct Answerverifiedadditional...View AnswerShow Answer

Select the statement on which each of the items provided below would be reported. -Dividends for the period.

Correct AnswerverifiedShow Answer

Carlton Industries has identified the following items and would like you to answer a few questions about their effect on Stockholders' Equity. -Which item would not be recorded until declared?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Port, Inc.paid a cash dividend on January 2 that had been declared prior to the end of its fiscal year.The entry to pay the dividend will

Correct AnswerverifiedShow Answer

Which of the following is reported as a financing activity?

Correct AnswerverifiedShow Answer

Authorized stock represents the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

[APPENDIX] A partnership can be owned by one or more entities or individuals.

Correct AnswerverifiedShow Answer

The Treasury Stock account should be considered an asset account.

Correct AnswerverifiedShow Answer

When the owner of a sole proprietorship withdraws assets from the business for personal use

Correct AnswerverifiedShow Answer

The participating feature of stock allows stockholders to sell stock back to the company.

Correct AnswerverifiedShow Answer

The statement of stockholders' equity

Correct AnswerverifiedShow Answer

If 20,000 shares are authorized, 15,000 shares are issued, and 500 shares are held as treasury stock, a cash dividend of $1 per share would amount to $15,000.

Correct AnswerverifiedShow Answer

Which of the following statements regarding partnerships is true?

Correct AnswerverifiedShow Answer

Tropical Co.declared a cash dividend of $30,000.The entry includes a(n)

Correct AnswerverifiedShow Answer

Manson World reported the following: Common stock, $1 par, 200,000 shares authorized, 100,000 shares issued and outstanding What is the effect of a 2-for-1 stock split if the market value of the common stock is $20 per share when the stock split is declared?

Correct AnswerverifiedShow Answer

Which of the following is true concerning a sole proprietorship?

Correct AnswerverifiedShow Answer

Dali Company has 15,000 shares of stock authorized at January 1.Dali issues 4,500 shares to the stockholders during the year and then the company repurchases 1,500 shares as treasury stock.Based on this information, how many shares are outstanding at December 31?

Correct AnswerverifiedShow Answer

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additional...
View Answer

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