Question 1

Corporations are required to make quarterly estimated tax payments based on estimated tax expense.

	True
	False

Question 2

Both cash dividends and stock dividends decrease the total stockholder's equity.

	True
	False

Question 3

The Stockholder's Equity section of the balance sheet reports contributed capital separate from retained earnings.

	True
	False

Question 4

Retained earnings do not represent a cash fund.

	True
	False

Question 5

A declaration and distribution of a 20 percent stock dividend on common stock will:

	not change the total stockholder's equity
	Increase the assets of the corporation
	result in an increase in the book value of each share of common stock outstanding
	increase the liabilities of the corporation

Question 6

The declaration of a cash dividend will result in a decrease in:

	cash
	retained earnings
	Contributed capital
	Income taxes

Question 7

Treasury Stock is often purchased for all the following reasons except:

	to distribute at a later date in connection with an employee incentive plan.
	to avoid a hostile takeover.
	To maintain or increase market value for the company stock.
	To increase stockholders' book value per share.

Question 8

To systematically accumulate cash for the retirement of bonds at maturity, a corporation may set up a bond sinking fund investment.

	True
	False

Question 9

Interest on bonds must be paid in full even when the corporation operated at a loss.

	True
	False

Question 10

If the market rate of interest on the day that bonds are issued is lower than the face rate of interest the bonds will sell at a discount.

	True
	False

Question 11

When bonds are sold at a market price of 105, the cash received for the bonds is 105 percent of face value

	True
	False

Question 12

When bonds mature, a corporation will pay the bondholders

	the current market value of the bonds.
	the face mount plus the original premium or minus the original discount.
	the face amount plus the interest accrued since the date the bonds were issued.
	the face amount of the bonds.