21. When a company buys its own shares and accounts for the transaction as treasury stock at cost, the effect on the balance sheet of the company is:

a. Treasury shares are recognized as an asset and cash is reduced for the same amount, so the total assets do not change. Nor does it change the Heritage.

b. The purchase of shares in the portfolio is recorded as an expense, reducing the assets and equity.

c. Portfolio shares are presented as a reduction in Equity. The cash will reduced by the same amount.

d. Cash is reduced and retained earnings are reduced by the same amount.

22. The Gain on resale of portfolio shares account:

a. Presented in the Statement of Income and Expenses

b. It is presented as Other comprehensive income.

c. It is recorded directly under Accumulated other comprehensive income.

d. Does not exist

23. What type of financial statement item represents the payment of a dividend in cash?

a. Distribution to owners (Distribution to owners)

b. Spent

c. Loss

d. Investments by owners

24. A company has cumulative preferred shares. In 2022 they were not declared dividends:

a. The owners of those preferred shares will never collect the 2022 dividend

b. The non-declaration of the dividend only affected common shareholders. The company paid preferred stockholders.

c. The preferred dividend of 2022 accumulates and the company will have to present a debt in its state of affairs.

d. The 2022 preferred dividend is cumulative and the company will need to disclose the fact that that there are cumulative preferred dividends, but will not recognize a debt.

25. When a company declares a stock dividend, but does not distributed yet:

a. Recognize an expense on the statement of income and expense

b. Recognizes Other comprehensive loss

c. Recognize a current debt

d. None of the above