Question 1

Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:

Total Assets, Total Liabilities, Total Shareholders' Equity

Question options:

a)

Increase, Decrease, No Change

b)

No Change, Increase, Decrease

c)

Decrease, No Change, Increase

Question 4

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a

Question options:

a)

corporation is organized for the purpose of making a profit.

b)

corporation is an accounting economic entity.

c)

corporations temporary accounts are closed at the end of the accounting period.

Question 6

The feature that enables the preferred shareholders to exchange their preferred shares for common shares is the

Question options:

cumulative preference.

participating feature.

convertible feature.

Question 7

Patterson Corporation issued 4 000, no par value common shares (with a current book value of $3 per share) in exchange for a truck. The truck had a fair market value of $20 000. The entry to record the transaction includes a credit to Common Shares for

Question options:

$8 000.

$4 000.

$20 000.

Question 9

If Chu Corporation has total shareholders equity of $1,500 000, preferred share-holders equity of $500 000, $50 000 of preferred dividends in arrears, $50 000 of current preferred dividends, and 90 000 common shares, book value per common share is

Question options:

$15.56.

$10.00.

$16.67.