A dividend declaration increases total stockholders' equity.

Question 1 options:

a) Trueb) False

Andy Corporation issues 5,000 shares of $10 par value common stock for $12 cash per share.The entry to record this transaction includes:

Question 2 options:

a)

A debit to Paid-In-Capital in Excess of Par Value for $12,000.

b)

A credit to cash for $60,000.

c)

A credit to Common Stock for $50,000.

d)

None of the above.

Which of the following events is first when a corporation pays a dividend?

Question 3 options:

a)

Declaration.

b)

Payment.

c)

Ex-dividend.

d)

Date of record.

e)

None of these.

When the common stock account is disclosed on the balance sheet, it is reported at:

Question 4 options:

a)

current market value.

b)

average issue price.

c)

par or stated value.

d)

lower of cost or market.

Little Bo Beep 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:

Question 5 options:

a)

debit to Cash for $10,000.

b)

debit to Paid-in Capital in Excess of Par for $27,500.

c)

credit to Common Stock for $10,000.

d)

credit to Gain on Stock $37,500.

e)

None of these.

Which of the following is not a characteristic of the corporate form of organization?

Question 6 options:

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)

The company President decides the amount of dividends to be paid.

d)

The corporation is an effective vehicle for obtaining large amounts of capital.

e)

None of these.

Sheriff Woody Corporation shows a total of $800,000 in its common stock account and $1,600,000 in its paid-in capital in excess of par value - common stock account. The par value of Flagler's common stock is $6. How many shares of Flagler stock have been issued?

Question 7 options:

a)

133,333.

b)

400,000.

c)

150,500.

d)

None of the above.

When a payment of a previously declared dividend is paid, it normally has the following effect:

Question 8 options:

a)

a decrease in liabilities.

b)

a decrease in working capital.

c)

a decrease in stockholders' equity.

d)

All of the above.

e)

None of these.

The par value of a company's stock:

Question 9 options:

a)

dictates the initial price of the stock.

b)

may be revised each time a company issues more shares of stock.

c)

is generally greater than market value.

d)

has little connection to the market value of the stock.

Which of the following is NOT an advantageous feature of the corporate form of organization?

Question 10 options:

a)

Limited liability.

b)

Perpetual existence.

c)

Transferability of ownership.

d)

Double Taxation

A corporation is created by registering your business name, while appointing a board of directors and filing articles of incorporation.

Question 11 options:

a) True b) False

Which of the following would be a disadvantage to a company being formed as a sole proprietorship?

Question 12 options:

a)

Double taxation.

b)

Unlimited liability.

c)

Ease of formation.

d)

All the above.

Which of the following statements is true?

Question 13 options:

a)

Preemptive rights make it easy for a corporation to issue additional shares.

b)

A corporate entity is typically of unlimited duration.

c)

One purpose of a corporation is to avoid "double taxation."

d)

A corporation can issue common or preferred stock, but not both.

e)

None of these.

The legal capital plus amounts paid in excess of par values is "Total paid in capital".

Question 14 options:

a) True b) False

Preferred stock has no differential treatment than with common stock for both dividends and liquidation proceeds.

Question 15 options:

a) True b) False

The statement of stockholders' equity includes information about:

Question 16 options:

a)

Beginning equity account balances.

b)

Ending equity account balances.

c)

Dividends.

d)

All of the above.

e)

None of these.

Because of the limited liability feature, stockholders may be held liable for the debts of the business.

Question 17 options:

a) True b) False

When completing financial statement analysis for Buzz Lightyear Corporation, which of the following are forms of comparison:

Question 18 options:

a)

Comparing changes in the same item over a number of periods.

b)

Comparing key relationships within the same year.

c)

Comparing key items to industry averages.

d)

All of these answers are correct.

A stock split will have no effect on par value.

Question 19 options:

a) True b) False

Treasury stock transactions typical produce losses in the income statement, but not gains.

Question 20 options:

a) True b) False