1. Which of the following is not a feature of the corporate form of organization? A. Limited liability. B. Perpetual existence. C. Transferability of ownership. D. Limited life. E. None of these.

2. Which of the following statements is true? A. Preemptive rights make it easy for a corporation to issue additional shares. B. One purpose of a corporation is to avoid "double taxation." C. A corporate entity is typically of unlimited duration. D. A corporation can issue common or preferred stock, but not both. E. None of these.

3. Which of the following is not a characteristic of the corporate form of organization? A. The owners of a corporation cannot lose more than the amount of their investment. B. Shares of stock in a corporation are readily transferable. C. Stockholders decide by majority vote the amount of dividends to be paid. D. The corporation is an effective vehicle for obtaining large amounts of capital. E. None of these.

4. Stringer Corporation issued 5,000 shares of $2 par value common stock. The issue price was $7.50 per share. The entry to record this transaction includes a: A. debit to Cash for $10,000. B. debit to Paid-in Capital in Excess of Par for $27,500. C. debit to Common Stock for $10,000. D. credit to Gain on Stock $37,500. E. None of these.

5.If 100,000 shares of common stock are authorized, but only 50,000 shares are issued, then: A. the other 50,000 shares become the property of the state. B. the other 50,000 shares must be issued within 90 days. C. notes should identify the number of shares authorized, issued, and outstanding. D. the underwriter must purchase the other 50,000 shares. E. None of these.

6. Which of the following dividend events comes before all of the others? A. Declaration. B. Payment. C. Ex-dividend. D. Date of record. E. None of these.