Question 1

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 2

The declaration of a stock dividend will

Accepted Answer

A)  increase paid-in capital.
B)  change the total of stockholders' equity.
C)  increase total liabilities.
D)  increase total assets.E) B) and D)
F) A) and B)

Question 3

The Accumulated Other Comprehensive Income account can have either a debit or credit balance.

Accepted Answer

A) True 
 B)False

Question 4

Assume that all balance sheet amounts for Marley Company represent average balance figures.  What is the return on common stockholders' equity for Marley?

Accepted Answer

A)  19.3%
B)  16.7%
C)  12.5%
D)  10.0%E) A) and C)
F) None of the above

Question 5

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share.The company issued 3,000 shares of stock to acquire land recently advertised at $100,000.When recording this transaction, Barton Company will

Accepted Answer

A)  debit Land for $100,000.
B)  credit Common Stock for $93,000.
C)  debit Land for $93,000.
D)  credit Paid-In Capital in Excess of Par for $93,000.E) A) and B)
F) B) and C)

Question 6

Which of the following would not be true of a privately held corporation?

Accepted Answer

A)  It is sometimes called a closely held corporation.
B)  Its shares are regularly traded on the New York Stock Exchange.
C)  It does not offer its shares for sale to the general public.
D)  It is usually smaller than a publicly held company.E) B) and D)
F) None of the above

Question 7

The stockholders' equity statement shows the changes in each stockholders' equity account and in total stockholders' equity during the year.

Accepted Answer

A) True 
 B)False

Question 8

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000.As a result of this event,

Accepted Answer

A)  Evergreen's Common Stock account decreased $50,000.
B)  Evergreen's total stockholders' equity decreased $115,000.
C)  Evergreen's Paid-in Capital in Excess of Par account decreased $65,000.
D)  All of these answers are correct.E) None of the above
F) B) and D)

Question 9

Of the various dividend types, the two most common types in practice are

Accepted Answer

A)  cash and large stock.
B)  cash and property.
C)  cash and small stock.
D)  property and small stock.E) A) and D)
F) B) and C)

Question 10

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

Accepted Answer

A)  the sole proprietorship.
B)  the partnership.
C)  the corporation.
D)  not known.E) A) and D)
F) C) and D)

Question 11

Accepted Answer

Township, Inc.has 10,000 shares of 5%, $100 par value, noncumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2020, and December 31, 2021.The board of directors declared and paid a $50,000 dividend in 2020.In 2021, $110,000 of dividends are declared and paid.What are the dividends received by the preferred and common shareholders in 2021?  ) undefined
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Question 12

Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity section.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

The acquisition of treasury stock by a corporation

Accepted Answer

A)  increases its total assets and total stockholders' equity.
B)  decreases its total assets and total stockholders' equity.
C)  has no effect on total assets and total stockholders' equity.
D)  requires that a gain or loss be recognized on the income statement.E) All of the above
F) None of the above

Question 15

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

Accepted Answer

A)  decrease total liabilities and stockholders' equity.
B)  increase total expenses and total liabilities.
C)  increase total assets and stockholders' equity.
D)  decrease total assets and stockholders' equity.E) A) and C)
F) B) and C)

Question 16

The payout ratio is computed by dividing cash dividends declared on common stock by

Accepted Answer

A)  net income.
B)  retained earnings.
C)  total paid-in capital.
D)  total stockholders' equity.E) A) and B)
F) A) and C)

Question 17

If a corporation has only one class of stock, it is referred to as

Accepted Answer

A)  classless stock.
B)  preferred stock.
C)  solitary stock.
D)  common stock.E) A) and B)
F) A) and C)

Question 18

A corporation must be incorporated in each state in which it does business.

Accepted Answer

A) True 
 B)False

Question 19

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 C)
F) All of the above

Question 20

A corporate board of directors does not generally

Accepted Answer

A)  select officers.
B)  formulate operating policies.
C)  declare dividends.
D)  execute policy.E) A) and B)
F) A) and C)

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

The declaration of a stock dividend will

Correct Answer
verified

Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity section.

Correct Answer
verified

The stockholders' equity statement shows the changes in each stockholders' equity account and in total stockholders' equity during the year.

Correct Answer
verified

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity for Marley?

Correct Answer
verified

The payout ratio is computed by dividing cash dividends declared on common stock by

Correct Answer
verified

Of the various dividend types, the two most common types in practice are

Correct Answer
verified

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000.As a result of this event,

Correct Answer
verified

Correct Answer
verified

The acquisition of treasury stock by a corporation

Correct Answer
verified

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

Correct Answer
verified

A corporate board of directors does not generally

Correct Answer
verified

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Correct Answer
verified

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

Correct Answer
verified

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share.The company issued 3,000 shares of stock to acquire land recently advertised at $100,000.When recording this transaction, Barton Company will

Correct Answer
verified

The Accumulated Other Comprehensive Income account can have either a debit or credit balance.

Correct Answer
verified

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

Correct Answer
verified

If a corporation has only one class of stock, it is referred to as

Correct Answer
verified

Which of the following statements concerning taxation is accurate?

Correct Answer
verified

Which of the following would not be true of a privately held corporation?

Correct Answer
verified

A corporation must be incorporated in each state in which it does business.

Correct Answer
verified

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

The declaration of a stock dividend will

Correct AnswerverifiedShow Answer

Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity section.

Correct AnswerverifiedShow Answer

The stockholders' equity statement shows the changes in each stockholders' equity account and in total stockholders' equity during the year.

Correct AnswerverifiedShow Answer

Assume that all balance sheet amounts for Marley Company represent average balance figures. What is the return on common stockholders' equity for Marley?

Correct AnswerverifiedShow Answer

The payout ratio is computed by dividing cash dividends declared on common stock by

Correct AnswerverifiedShow Answer

Of the various dividend types, the two most common types in practice are

Correct AnswerverifiedShow Answer

Evergreen Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000.As a result of this event,

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The acquisition of treasury stock by a corporation

Correct AnswerverifiedShow Answer

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is

Correct AnswerverifiedShow Answer

A corporate board of directors does not generally

Correct AnswerverifiedShow Answer

The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Barton Company is a publicly held corporation whose $1 par value stock is actively traded at $31 per share.The company issued 3,000 shares of stock to acquire land recently advertised at $100,000.When recording this transaction, Barton Company will

Correct AnswerverifiedShow Answer

The Accumulated Other Comprehensive Income account can have either a debit or credit balance.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a corporation has only one class of stock, it is referred to as

Correct AnswerverifiedShow Answer

Which of the following statements concerning taxation is accurate?

Correct AnswerverifiedShow Answer

Which of the following would not be true of a privately held corporation?

Correct AnswerverifiedShow Answer

A corporation must be incorporated in each state in which it does business.

Correct AnswerverifiedShow Answer

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