Multiple choice:

1. What is the document called that is used by a state to grant permission to form a corporation?

a. Charger b. Proxy c. Stock certificate d. Bylaw agreement

2. Which of the following statements describing a corporation is true?

a. Stockholders are the creditors of a corporation

b. A corporation is subject to greater governmental regulation than a sole proprietorship or a partnership

c. When ownership of a corporation changes, the corporation terminates

d. Stockholders own the business and manage its day to day operation

3. Which of the following best describes paid in capital?

a. Investments by the stockholdersof a corporation

b. Investments by the creditors of a corporation

c. Capital that the corporation has earned through profitable operations

d. All of the above

4. which of the following best describes regained earnings?

a. It is classified as a liability on the corporate balance sheet

b. It does not appear on any financial statement

c. It represents capital that the corporation has earned through profitable operations

d. It represents investments by the stockholders of a corporation

5. What individual has the authority to obligate the corporation to pay dividends?

a. Total stockholders

b. The board of directors

c. The president of the company

d. The chief executive officer

6. A corporation issues 1,800 shares of $10 par value common stock in exchange for land with a current market value of $23,000. How would this be recorded in the Land account?

a. Debited for $23,000

b. Credited for $18,000

c. Credited for $20,000

d. Debited for $18,000

7. Which of the following is true for dividends?

a. Dividends are a distribution of cash to the stockholders

b. Dividends decrease both the assets and the total stockholders equity of the corporation

c. Dividends increase retained earnings

d. Both (a) and (b) are correct

8. dividends on cumulative preferred stock of $2,500 are in arrears for 2011. During 2012, the total dividendsd declared amount to $10,000. There are 6,000 shares of $10 par, 10% cumulative preferred stock outstanding and 10,000 shares of $5 par common stock outstanding. What is the total amount of dividends payable to each class of stock in 2012?

a. $5,000 to preferred, $5,000 to common

b. $6,000 to preferred, $4,000 to common

c. $8,500 to preferred, $1,500 to common

d. $10,000 to preferred, $0 to common

9. Which of the following is true about dividends in arrears?

a. They are a liability on the balance sheet

b. They are dividends passed on cumulative preffered stock c. They are dividends passed on noncumulative preferred stock

d. They are dividends passed on common stock.

10. The following is a list of stockholders equity accounts appearing on the balance sheet for ONeil Corporation on December 31, 2011: Common stock, $10 par value $300,000 APIC- Common 200,000 Retained Earnings 225,000 Preferred stock, $50 par value 125,000 APIC- Preferred 30,000

a. how many shares of preferred stock have been issued?

b. What was the average issuance price of the preferred stock per share?

c. How many shares of common stock have been issued?

d. What is total paid in capital?

e. What is total stockholders equity?