1. _______ The net effect of a stockdividend is that Retained Earnings decreases, and a. cash decreases b. Dividends Payable increases c. Paid in Capital increases d. None of these

2. _______ Johnson Company issued an 8% cumulative preferred stock with $100 par. If the preferred stockholders received no dividend in year one, but received a dividend in year 2, the amount of the dividend per share would be: a. $4.00 per share b. $8.00 per share c. $16 per share d. unknown

3. _______ The right to maintain your current ownership percentage when new common shares are about to be issued is called the a. voting right b. mutual agency c. liquidation right d. pre emptive right

4. _______ The declaration of a cash dividend has what effect? A. common stock increases and cash decreases b. retained earnings decreases and dividends payable increases c. dividends payable decreases and cash decreases d. retained earnings decreases and paid in capital increases.

5. _______ Investment A results in cash flows of $1,000 in year 1 and $2,000 in year 2. Investment B results in cash flows of $1,000 per year for three years. Which statement is true? A. Investment A is an annuity b. investment B is an annuity c. both investments are annuities d. neither investment is an annuity

6. _______ Bob invests $4,000 in an account that earns 6% per year. How much will Bobs investment grow to in 3 years? A. $4,494 b. $4,764 c. $3,358 d. I have no idea

7. _______ When calculating the present value of a bond, which table do you use? A. the PV of $1 b. the PV of an annuity of $1 c. both tables d. none of these

8. _______ Johnson Corporation issued bonds at a discount because the interest rate offered on the bond was less than the market rate. The discount represents a. extra income for Johnson b. extra future interest expense for Johnson c. less future interest expense for Johnson d. none of these

9. _______ The major source of new accounting principles in the United States is from the a. SEC b. FASB c. IRS d. SCCC Accounting Dept.

10._______ For Ivy Corporation, Income Summary would be closed to: a. Ivy Capital b. Ivy Common Stock c. Retained Earnings d.