1. Which of the following does not describe what the board of directors is responsible for? A) Setting policies for future operations B) Declare dividends to be paid to the shareholders C) Hires employees D) Reviews the operations ot the corporation.

2. Which of the following does not describe the characteristic ofa preferred shareholder? A) They receive a limited amount of dividends B) They are listed before common shares in the equity section of the balance sheet C) They can vote before the common shareholders D) They receive dividends before common shareholders.

3. Retained earningS represents A) The year's net income earned by the corporation B) The amount of net income distributed to shareholders C)he amount of net income carned by the corporation in the current year not distributed to its shareholders D) The total net income earmed by a company over its life not distributed to shareholders

4. Pre-emptive rights refers to A) The right to receive assets upon liquidation of the corporation B) The right to participate in the management of the corporation by voting at shareholders' meetings C) The right for the common shareholder to maintain their proportionate interest in the corporation if additional shares are issued D) The right to receive dividends

5. Which of the following is not a true statement about the formation of a corporation in Canada' A) The government issues a certificate of incorporation once the articles of incorporation are approved B) An articles of incorporation is submitted to the appropriate government for consideration C) The articles of incorporation describes the total number of shares issued to shareholders D) It can be formed under both federal or provincial laws

6. Alany Inc pays S5,000 cash for the organization of its corporation. What is included in the joumal entry to record this transaction A) A debit to an expense account B) A debit to an asset account C) A credit to an equity account D) A credit to a liability account

7). What 1s the ettect ot a share split? A) Inerease in the cost per share B) Increase in the number of shares outstanding but shares issued 1s not changed C) Increase in the number of shares issued and outstanding D) Decrease in the number of shares issued

8. Nathalie Inc. has 100,000 shares authorized, 2,000 shares issued and 1,800 outstanding, Ie has decided to declare a 2-1or-I share split when the average cost per share was S10 What is included in the journal enty to record the share split? A) A credit to common shares for S40,000 B) A credit to common shares for S20,000 C)No joumal entry 1s recorded D) A credit to common shares for S4,000