The beginning Common Stock balance is corrected due to an error in a previous accounting period

D.

The beginning Retained Earnings balance is corrected due to an error in a previous accounting period

1. When a company announces a 2-for-1 stock split (check all that apply)

A.

The market price of the stock is typically cut in half

B.

There is no effect on assets, liabilities, or total stockholders' equity

C.

A journal entry is recorded where paid-in capital is increased and Retained Earnings is decreased.

D.

The par value of the stock is cut in half

2. Which of the following ratios measures the value that the stock market places on $1 of a company's earnings?

A.

Earnings Per Share

B.

Rate of Return on Common Stockholders' Equity

C.

Price/Earnings Ratio

D.

Debt-to-Equity Ratio

3. Which of the following would be subtracted as an adjustment to the operating activities section of the statement of cash flows when using the indirect method?

A.

An increase in Merchandise Inventory

B.

A decrease in Accounts Receivable

C.

An increase in Accounts Payable

D.

Amortization Expense

4. Which of the following statements are true regarding the issuance of a small stock dividend to common stockholders? (check all that apply)

A.

The Stock Dividends account is debited on the declaration date based on the market value of the stock

B.

The Paid-In Capital in Excess of Par account is credited for the issuance amount above the par value of the stock

C.

The Common Stock Dividend Distributable account is credited for the par value of the stock

D.

The Stock Dividends account is debited on the distribution date based on the par value of the stock

Which of the following ratios measures the amount of a company's net income (loss) for each share of its common stock outstanding?

A.

Earnings Per Share

B.

Debt-to-Equity Ratio

C.

Price/Earnings Ratio

D.

Rate of Return on Common Stockholders' Equity