Q1- Under most circumstances, in order to recognize revenue:

Select one:

a. cash must have been received.

b. the entity must expect to receive cash in the future.

c. the entity must have paid for all expenses incurred in generating the revenue.

d. the revenue must be realized or realizable, and earned.

Q2- If the market price of a bond exceeds its face amount:

Select one:

a. the coupon rate is less than the market interest rate.

b. the coupon rate is more than the market interest rate.

c. the company's ROI and working capital have been increasing over time.

d. the maturity rate has been declining.

Q3- Current maturities of long-term debt:

Select one:

a. reflect overdue installments of bonds payable.

b. are classified with long-term debt.

c. represent cash that has been set aside for debt payments due within a year.

d. permit a more accurate determination of working capital.

Q4- The declaration of a cash dividend by the directors results in:

Select one:

a. a decrease in cash and a decrease in retained earnings.

b. a decrease in retained earnings and an increase in current liabilities.

c. a decrease in net income and a decrease in cash.

d. a decrease in net income and an increase in current liabilities.

Q5- Braco has 40,000 shares of $100 par value common stock outstanding, and 10,000 shares in the treasury. The number of additional shares that would be issued in a 5% stock dividend is:

Select one:

a. 500.

b. 1,000.

c. 2,000.

d. 2,500.

Q6- When common stock has a par value:

Select one:

a. the liability of the stockholders is limited to the par value.

b. there will probably be additional paid-in capital on the balance sheet.

c. the market value of the stock will be higher than if there is no par value.

d. the paid-in capital will equal the par value of the number of shares issued.

Q7- The term preemptive right pertains to which of the following?

Select one:

a. The Board of Directors rights in liquidation.

b. Present shareholders' right to purchase shares from any additional share issuances.

c. Present shareholders' right to purchase treasury shares when reissued.

d. Preferred stockholders' right to dividends.

Q8- When a company splits its common stock 3 for 1:

Select one:

a. total paid-in capital increases by a factor of 3.

b. retained earnings is decreased by the market value of the shares issued.

c. the market value of the company's stock normally falls by two-thirds.

d. the stockholders are assured of receiving larger cash dividends.