Question 56

2 pts

Which of the following describes a secured bond?

a bond that matures at one specified time

a bond that matures in installments at regular intervals

a bond that is not backed by specific assets

a bond that is backed by issuer's specific assets

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Question 57

2 pts

Preferred stock is stock ________.

that sells for a high price

that gives its owners certain advantages over common stockholders

that is distributed to employees as annual bonuses

that is distributed by corporations to avoid liquidation

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Question 58

2 pts

Restrictions on retained earnings are ________.

reported on the income statement

designed to maximize dividends paid to shareholders

usually reported in the notes to the financial statements

reported on the statement of cash flows

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Question 59

2 pts

A corporation declares a dividend of $0.50 per share on 12,000 shares of common stock. Which of the following is included in the entry to record the declaration?

Dividends Payable-Common is debited for $6,000.

Cash Dividends is debited for $6,000.

Cash Dividends is credited for $6,000.

Paid-In Capital in Excess of Par-Common is credited for $6,000.

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Question 60

2 pts

Which of the following is a true statement?

Stockholders are guaranteed annual dividends.

Stockholders may authorize a business contract on behalf of the corporation.

Stockholders receive their proportionate share of any assets remaining after the corporation pays its debts and liquidates.

Stockholders may determine the issue price of common stock.

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Question 61

2 pts

Which of the following is an advantage of the corporate form of business?

limited liability of stockholders

low start-up costs

less degree of government regulation

separation of ownership and management

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Question 62

2 pts

Which of the following occurs when a 2-for-1 stock split is declared?

The balance in Common Stock remains the same.

The balance in Common Stock is reduced to half the original amount.

The balance in Paid-in Capital in Excess of Par-Common doubles.

The balance in Common Stock doubles.

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Question 63

2 pts

A business's cash receipts and cash payments for a specific period are reported on a(n) ________.

cash reconciliation statement

statement of cash flows

balance sheet

income statement

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Question 64

2 pts

Which of the following sections of the statement of cash flows includes activities that affect net income on the income statement?

the financing activities section

the operating activities section

the investing activities section

the non-cash investing and financing section

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Question 65

2 pts

Which of the following is the typical order of the sections on a statement of cash flows?

operating, financing, investing

investing, operating, financing

financing, investing, operating

operating, investing, financing