1. An advantage of the corporate form of business entity is

a.double taxation.

b.that corporations are subject to more governmental regulations.

c.unlimited liability for stockholders.

d.the ease of transfer of ownership.

2. Which of the following statements concerning taxation is accurate?

a.Corporations pay federal income taxes but not state income taxes.

b.Only the stockholders must pay taxes on corporate income.

c.Corporations pay federal and state income taxes.

d.Corporations pay income taxes but their stockholders do not.

One of the main disadvantages of the corporate form is

a.professional management.

b.the charter.

c.double taxation.

d.that a corporation must issue stock.

The entry to record the issuance of common stock at a price above par includes a credit to

a.Organizational Expenses.

b.Cash.

c.Preferred Stock.

d.Paid-In Capital in Excess of ParCommon Stock.

The number of shares of stock that a corporation can issue as stated in its charter is referred to as

a.outstanding.

b.arrears.

c.issued.

d.authorized.

The number of shares remaining in the hands of shareholders after some stock has been reacquired is referred to as the shares

a.outstanding.

b.in arrears.

c.issued.

d.authorized.

The journal entry to issue 1,000,000 shares of $5 par common stock for $9 per share on July 2 would be

a.

July 2	Cash	9,000,000
	Common Stock		5,000,000
	Paid-In Capital in Excess of Par		4,000,000

b.

July 2	Cash	5,000,000
	Paid-In Capital in Excess of ParC/S	4,000,000
	Common Stock		9,000,000

c.

July 2	Cash	5,000,000
	Common Stock		5,000,000

d.

July 2	Cash	9,000,000
	Common Stock		9,000,000

When a cash dividend is declared, which of the following accounts is credited?

a.Common Stock

b.Cash Dividends Payable

c.Paid-In Capital

d.Cash Dividends

Cash dividends are paid on __________ stock.

a.outstanding

b.authorized

c.issued

d.treasury

All of the following are conditions for a cash dividend except

a.sufficient cash.

b.sufficient retained earnings.

c.formal action by the board of directors.

d.All of these choices are correct.