Question 1

Which of the following represents the largest number of common shares?

Accepted Answer

A)  Treasury shares
B)  Issued shares
C)  Outstanding shares
D)  Authorized sharesE) None of the above
F) C) and D)

Question 2

The values assigned to assets during the formation of a partnership must

Accepted Answer

A)  equal in value.
B)  include the effect of inflation.
C)  be agreed upon by all of the partners.
D)  be recorded by the partnership.E) B) and D)
F) B) and C)

Question 3

When preferred stock is cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is not true of a corporation?

Accepted Answer

A)  It may buy, own, and sell property.
B)  It may sue and be sued.
C)  The acts of its owners bind the corporation.
D)  It may enter into binding legal contracts in its own name.E) A) and B)
F) None of the above

Question 5

Jade Juices Inc.had 200,000 shares of common stock outstanding before a stock split occurred, and 400,000 shares outstanding after the stock split.The stock split was

Accepted Answer

A)  2 for 4.
B)  4 for 1.
C)  1 for 4.
D)  2 for 1.E) A) and B)
F) A) and C)

Question 6

Which one of the following is not a characteristic of a sole proprietorship?

Accepted Answer

A)  Easy formation
B)  No dilution of profits
C)  Limited life
D)  Limited liabilityE) A) and B)
F) None of the above

Question 7

Partnership net income or net loss is shared equally unless

Accepted Answer

A)  the partnership contract specifically indicates the manner in which net income and net loss are to be divided.
B)  at the end of the year the partners agree to divide the income at a different percentage.
C)  one partner has put more effort and time into the business than the other.
D)  the government changes their tax laws requiring the partners to pay more personal income taxes.E) A) and C)
F) None of the above

Question 8

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

Accepted Answer

A)  publicly held and privately held.
B)  stock and non-stock.
C)  inside and outside.
D)  majority and minority.E) B) and C)
F) A) and B)

Question 9

One major challenge of owning a sole proprietorship is

Accepted Answer

A)  raising funds on one person's collateral.
B)  finding shareholders.
C)  the division of net income.
D)  double taxation.E) B) and C)
F) None of the above

Question 10

Each partner's initial investment in a partnership should be recorded at the book value of the asset at the date of their transfer to the partnership.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements concerning taxation is accurate?

Accepted Answer

A)  Partnerships pay state income taxes but not federal income taxes.
B)  Corporations pay federal income taxes but not state income taxes.
C)  Corporations pay federal and state income taxes.
D)  Only the owners must pay taxes on corporate income.E) B) and D)
F) A) and C)

Question 12

A small stock dividend is defined as

Accepted Answer

A)  less than 30% but greater than 25% of the corporation's issued stock.
B)  between 50% and 100% of the corporation's issued stock.
C)  more than 30% of the corporation's issued stock.
D)  less than 20-25% of the corporation's issued stock.E) All of the above
F) C) and D)

Question 13

Corporations generally issue stock dividends in order to

Accepted Answer

A)  increase the market price per share.
B)  exceed stockholders' dividend expectations.
C)  increase the marketability of the stock.
D)  decrease the amount of capital in the corporation.E) C) and D)
F) A) and B)

Question 14

Dividends may be declared and paid in cash or stock.

Accepted Answer

A) True 
 B)False

Question 15

The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to

Accepted Answer

A)  decrease current liabilities and stockholders' equity.
B)  increase total assets and stockholders' equity.
C)  increase current liabilities and stockholders' equity.
D)  decrease stockholders' equity and total assets.E) All of the above
F) A) and D)

Question 16

Organization costs are expensed immediately, even though they conceptually benefit the corporation over its entire life.

Accepted Answer

A) True 
 B)False

Exam 14: Sole Proprietorships,partnerships, Andcorporations

Jade Juices Inc.had 200,000 shares of common stock outstanding before a stock split occurred, and 400,000 shares outstanding after the stock split.The stock split was

Correct Answer
verified

When preferred stock is cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Correct Answer
verified

Partnership net income or net loss is shared equally unless

Correct Answer
verified

A small stock dividend is defined as

Correct Answer
verified

Organization costs are expensed immediately, even though they conceptually benefit the corporation over its entire life.

Correct Answer
verified

Which one of the following is not a characteristic of a sole proprietorship?

Correct Answer
verified

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

Correct Answer
verified

The values assigned to assets during the formation of a partnership must

Correct Answer
verified

The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to

Correct Answer
verified

Each partner's initial investment in a partnership should be recorded at the book value of the asset at the date of their transfer to the partnership.

Correct Answer
verified

Corporations generally issue stock dividends in order to

Correct Answer
verified

Which of the following statements concerning taxation is accurate?

Correct Answer
verified

One major challenge of owning a sole proprietorship is

Correct Answer
verified

Dividends may be declared and paid in cash or stock.

Correct Answer
verified

Which of the following represents the largest number of common shares?

Correct Answer
verified

Which of the following is not true of a corporation?

Correct Answer
verified

Exam 14: Sole Proprietorships,partnerships, Andcorporations

Jade Juices Inc.had 200,000 shares of common stock outstanding before a stock split occurred, and 400,000 shares outstanding after the stock split.The stock split was

Correct AnswerverifiedShow Answer

When preferred stock is cumulative, preferred dividends not declared in a given period are called dividends in arrears.

Correct AnswerverifiedShow Answer

Partnership net income or net loss is shared equally unless

Correct AnswerverifiedShow Answer

A small stock dividend is defined as

Correct AnswerverifiedShow Answer

Organization costs are expensed immediately, even though they conceptually benefit the corporation over its entire life.

Correct AnswerverifiedShow Answer

Which one of the following is not a characteristic of a sole proprietorship?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The values assigned to assets during the formation of a partnership must

Correct AnswerverifiedShow Answer

The cumulative effect of the declaration and payment of a cash dividend on a company's balance sheet is to

Correct AnswerverifiedShow Answer

Each partner's initial investment in a partnership should be recorded at the book value of the asset at the date of their transfer to the partnership.

Correct AnswerverifiedShow Answer

Corporations generally issue stock dividends in order to

Correct AnswerverifiedShow Answer

Which of the following statements concerning taxation is accurate?

Correct AnswerverifiedShow Answer

One major challenge of owning a sole proprietorship is

Correct AnswerverifiedShow Answer

Dividends may be declared and paid in cash or stock.

Correct AnswerverifiedShow Answer

Which of the following represents the largest number of common shares?

Correct AnswerverifiedShow Answer

Which of the following is not true of a corporation?

Correct AnswerverifiedShow Answer

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