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4. When a corporation purchases its own stock, what account is debited for the cost of the stock? a. Common Stock Subscribed b. Treasury Stock
| 4. When a corporation purchases its own stock, what account is debited for the cost of the stock? | |||||||||
| a. Common Stock Subscribed | |||||||||
| b. Treasury Stock | |||||||||
| c. Preferred Stock | |||||||||
| d. Common Stock Receivable | |||||||||
| 5. The excess of the proceeds from selling treasury stock over its cost should be credited to: | |||||||||
| a. Retained Earnings | |||||||||
| b. Premium on Capital Stock | |||||||||
| c. Gain from Sale of Treasury Stock | |||||||||
| d. Paid-In Capital from Sale of Treasury Stock | |||||||||
| 6. The claims of the _____ must first be satisfied upon liquidation of a corporation. | |||||||||
| a. preferred stockholders | |||||||||
| b. cumulative preferred stockholders | |||||||||
| c. common stockholders | |||||||||
| d. creditors | |||||||||
| 7. A company with 20,000 authorized shares of $20 par common stock issued 12,000 shares at $50. | |||||||||
| Subsequently, the company declared a 5% stock dividend on a date when the market price was $60 per | |||||||||
| share. What is the amount transferred from the retained earnings account to paid-in capital accounts | |||||||||
| as a result of the stock dividend? | |||||||||
| a. $36,000 | |||||||||
| b. $30,000 | |||||||||
| c. $12,000 | |||||||||
| d. $6,000 | |||||||||
| 8. The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume | |||||||||
| that 60,000 shares were originally issued and 5,000 were subsequently reacquired. What is the number | |||||||||
| of shares outstanding? | |||||||||
| a. 5,000 | |||||||||
| b. 55,000 | |||||||||
| c. 60,000 | |||||||||
| d. 100,000 | |||||||||
| 9. The entry to record the issuance of common stock at a price above par would include a credit to: | |||||||||
| a. Donated Capital | |||||||||
| b. Retained Earnings | |||||||||
| c. Treasury Stock | |||||||||
| d. Paid-In Capital in Excess of Par-Common Stock | |||||||||
| 10. A corporation purchases 10,000 shares of its own $20 par common stock for $35 per share, | |||||||||
| recording it at cost. What will be the effect on total stockholders' equity? | |||||||||
| a. increase, $200,00 | |||||||||
| b. increase, $350,000 | |||||||||
| c. decrease, $200,000 | |||||||||
| d. decrease, $350,000 | |||||||||
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Auditing That Matters
Authors: Norman D Marks
1st Edition
1537662023, 978-1537662022
