1.Another term for paid-in capital is:

A)contributed capital

B)common stock

C)equity

D)capital stock

E)residual claim

2. Retained earnings are equal to:

A)owners' contributions

B)paid-in capital

C)common stock

D)capital stock

E)the entity's cumulative earnings (net income over the life of the entity) less any dividends paid.

3. Number of shares outstanding =

A)authorized shares - non-issued shares - treasury stock

B)authorized shares - non-issued shares + treasury stock

C)authorized shares + non-issued shares + treasury stock

D)authorized shares - non-issued shares + treasury stock

E)authorized shares - non-issued shares

4. The company is obliged to make up for the missed dividends to: A)bondholders

B)callable preferred stock holders

C)convertible preferred stock holders

D)cumulative preferred stock holders

E)all stock holders

5. Callable preferred stock gives additional flexibility to:

A)the creditors

B)the company

C)everybody

D)the stock holders

E)the bondholders

6. Convertible preferred stock gives additional flexibility to:

A)everybody

B)the bondholders

C)the creditors

D)the convertible stock holders

E)the company

7. If cumulative losses and dividends have exceeded cumulative net income, the company has:

A)a net loss

B)an accumulated deficit

C)to have its financial statements audited.

D)a negative cash flow

E)a negative working capital

8. Stock dividends

A)decrease Retained earnings and increase Common stock and Additional Paid-in Capital

B)decrease Retained earnings and decrease Common stock and Additional Paid-in Capital

C)increase Retained earnings

D)decrease Retained earnings and decrease cash

E)decrease Retained earnings and increase cash

9. When the market price of a frm's common stock is too low, the company should:

A)perform a stock split

B)issue convertible preferred stock

C)perform a stock dividend

D)perform a reverse stock split

E)issue convertible bonds

10. Stock held for future use for employee stock purchase plans or acquisitions of other companies or even to be resold for cash if additional capital is needed is called:

A)Common stock

B)Preferred stock

C)Treasury stock

D)Authorized stock

E)Issued stock