1 A stock dividend decreases the market price of the company's stock True False 2 Which of the following is not a characteristic of corporate ownership a Stockholders have no liability for the debts of the corporation b Shares of stock can be purchased in small increments C Corporate earnings are distributed as interest payments D Ownership interests are freely transferable 3 Miss Hap, the company bookkeeper, recorded the annual repair costs on the company's machinery as an increase to the Machinery account As a result, which of the following statements correctly describes this situation A Expenses will be overstated B Liabilities will be overstated C Stockholders' equity will be understated D Assets will be overstated 4 Ownership structure can vary from one company to another, but the most basic form of corporation offers A common stock B preferred stock C treasury stock D net income 5 A corporation does not have a legal obligation to pay dividends True False 6 Current liabilities are due A but not receivable for more than one year or the current operating cycle, whichever is longer B and receivable within the current operating cycle or one year, whichever is longer C but not payable for more than one year or the current operating cycle, whichever is longer D and payable within the current operating cycle or one year, whichever 7 Advantages of equity financing over debt financing include that A dividends are tax deductible B dividends are mandatory C stockholders' control will increase D equity financing does not require repayment 8 Which of the following accounts is used to record a small stock dividend on common stock but is not used to record a large stock dividend on common stock A Common Stock B Additional Paid In Capital C Cash D Retained Earnings 9 Income tax expense would be found on the income statement of a corporation, but not on the income statement of a sole proprietorship True False 10 Accumulated Depreciation is classified as an expense True False

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1. A stock dividend decreases the market price of the company's stock. True False 2. Which of the following is not a characteristic of corporate

A stock dividend decreases the market price of the company's stock.

True

False

Which of the following is not a characteristic of corporate ownership?

a.Stockholders have no liability for the debts of the corporation.

b.Shares of stock can be purchased in small increments.

C.Corporate earnings are distributed as interest payments.

D. Ownership interests are freely transferable.

Miss Hap, the company bookkeeper, recorded the annual repair costs on the company's machinery as an increase to the Machinery account. As a result, which of the following statements correctly describes this situation?

A.Expenses will be overstated.

B. Liabilities will be overstated.

C. Stockholders' equity will be understated

D. Assets will be overstated.

Ownership structure can vary from one company to another, but the most basic form of corporation offers:

A.common stock.

B. preferred stock.

C. treasury stock.

D. net income.

A corporation does not have a legal obligation to pay dividends.

True

False

Current liabilities are due:

A. but not receivable for more than one year or the current operating cycle, whichever is longer.

B. and receivable within the current operating cycle or one year, whichever is longer.

C.but not payable for more than one year or the current operating cycle, whichever is longer.

D. and payable within the current operating cycle or one year, whichever

Advantages of equity financing over debt financing include that:

A.dividends are tax deductible.

B. dividends are mandatory.

C. stockholders' control will increase.

D. equity financing does not require repayment.

Which of the following accounts is used to record a small stock dividend on common stock but is not used to record a large stock dividend on common stock?

A.Common Stock

B. Additional Paid-In Capital

C. Cash

D. Retained Earnings

Income tax expense would be found on the income statement of a corporation, but not on the income statement of a sole proprietorship.

True

False

10.

Accumulated Depreciation is classified as an expense.

True

False