THESE ARE ALL ONE QUESTION

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 1 options:

a)

Increase

Decrease

No change

b)

No Change

Increase

Decrease

c)

Decrease

Increase

Decrease

d)

Decrease

No change

Increase

Question 2 (1 point)

As a result of a stock dividend,

Question 2 options:

	total shareholders equity remains the same.
	total shareholders equity increases.
	total shareholders equity decreases.
	retained earnings remain unchanged.

Question 3 (1 point)

A corporation differs from a proprietorship and a partnership in that

Question 3 options:

	assets and liabilities are presented differently on the balance sheet.
	a corporation is considered a separate legal entity for taxation purposes.
	the cost principle only applies to proprietorships and partnerships.
	the owners of the corporation do not have a claim on the net assets of the business.

Question 4 (1 point)

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

Question 4 options:

a)	corporation is organized for the purpose of making a profit.

b)	corporation is subject to numerous federal and provincial government regulations.

c)	corporation is an accounting economic entity.

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

Question 5 (1 point)

If a corporation has only one class of shares, they are referred to as

Question 5 options:

a)	classless shares.

b)	preferred shares.

c)	solitary shares.

d)	common shares.

Question 6 (1 point)

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

Question 6 options:

	redeemable feature.
	cumulative preference.
	participating feature.
	convertible feature.

Question 7 (1 point)

Mason Manufacturing declared an 8% stock dividend when it had 150 000, no par value common shares, issued at $3 per share. The market price per common share was $12 per share when the dividend was declared. The entry to record this dividend declaration includes a credit to

Question 7 options:

	Retained Earnings for $36 000.
	Stock DividendsCommon for $144 000.
	Common Shares for $36 000.
	Common Stock Dividends Distributable for $144 000.

Question 8 (1 point)

Sankowski splits its 50 000, no par value common shares on a 2-for-1 basis. The company should record the transaction as a

Question 8 options:

	debit to Common Stock Dividends Distributable and a credit to Common Shares.
	memo entry.
	debit to Stock DividendsCommon and a credit to Common Stock Dividends Distributable.
	debit to Retained Earnings and a credit to Common Shares.

Question 9 (1 point)

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 9 options:

	$15.56.
	$10.00.
	$16.67.
	$11.11.

Question 10 (1 point)

Ownership of common shares ordinarily carries the right to

Question 10 options:

	declare dividends.
	establish a drawings account.
	enter into contracts for the corporation.
	vote on corporate actions that require shareholder approval.

Question 11 (1 point)

Which of the following statements regarding the date of a cash dividend declaration is not accurate?

Question 11 options:

	The dividend can be rescinded once it has been declared.
	The corporation is committed to a legal, binding obligation.
	The board of directors formally authorizes the cash dividend.
	A liability account must be increased.

Question 12 (1 point)

To calculate earnings per share, preferred dividends declared

Question 12 options:

	should be subtracted from net income.
	should be added to net income.
	have no impact on the earnings per share calculation.
	must be added to the number of common shares outstanding.