5)

The corporate form of organization offers which of the following disadvantages?

(2pts)

dissolution upon the death of a stockholder

attorney's fees

limited life

unlimited liability

8)

If shares of stock are sold or exchanged for more than par value, the excess is called

(2pts)

a discount.

a gain.

a premium.

earnings.

9)

Selena located an excellent office location and she and Ian rented the office space. Selena uses 30% of the space solely for her business; Ian uses 40% of the space solely for his business. The remainder is shared equally by both. How should the total rent and other space expenses be allocated?

(3pts)

30% to Selena; 40% to Ian

45% to Selena; 55% to Ian

50% to Selena; 50% to Ian

30% to Selena; 40% to Ian; 30% to Building Expense

10)

A corporation's common stock dividends is

(2pts)

debited to Retained Earnings.

credited to Retained Earnings.

debited to Paid-In Capital.

credited to Paid-In Capital.

11)

If stock is issued at a price above par value, the transaction that would be recorded is to

(2pts)

debit Cash, credit Common Stock or Preferred Stock, and credit Paid-In Capital in Excess of Par.

debit Common Stock or Preferred Stock, debit Paid-In Capital in Excess of Par, and credit Cash.

debit Cash, debit Common Stock or Preferred Stock, and credit Paid-In Capital in Excess of Par.

debit Paid-In Capital in Excess of Par, credit Common Stock or Preferred Stock, and credit Cash.

12)

A company receives a subscription for 4,000 shares of $1 par value common stock at $10 per share. The journal entry for this transaction would include a debit to

(2pts)

Common Stock Subscriptions Receivable, $40,000.

Common Stock Subscribed, $40,000.

Common Stock, $40,000.

Premium on Common Stock, $40,000.

15)

The balance of the income summary account of a corporation is transferred to which of the following accounts?

(2pts)

Capital Stock

Cash

Premium on Sale of Capital Stock

Retained Earnings

17)

The board of directors declared a $2 per share cash dividend on common stock and the corporation had 5,000 shares authorized and 4,000 shares outstanding and make a journal entry. The journal entry for the dividend payment would be

(3pts)

a debit to Cash Dividends for $8,000 and a credit to Common Dividends Payable for $8,000.

a debit to Cash Dividends for $10,000 and a credit to Common Dividends Payable for $10,000.

a debit to Cash Dividends Payable for $8,000 and a credit to Cash for $8,000.

a debit to Cash Dividends Payable for $10,000 and a credit to Cash for $10,000.

18)

The journal entry made on the date of declaration of a cash dividend to common stockholders includes a.

(2pts)

a debit to Cash Dividends and a credit to Common Dividends Payable.

a debit to Cash Dividends and a credit to Cash.

a debit to Common Dividends Payable and a credit to Cash Dividends.

a debit to Cash and a credit to Common Dividends Payable.

20)

An exchange of one share of an old issue of stock for a multiple number of shares of a new issue of stock with reduced par or stated value is known as a

(2pts)

property dividend.

stock dividend.

stock split.

liquidating dividend.