Filters
Question type
Study Flashcards

Which of the following statements is true with regard to equity capital?


A) The number of shares actually in the hands of stockholders are called outstanding shares.
B) It is unusual for corporations to have more than one class of stock outstanding at any point in time.
C) Preferred stock represents the shares of stock that have been permanently retired.
D) Issued shares represent the maximum number of shares that can be issued by a corporation.

E) All of the above
F) B) and C)

Correct Answer

verifed

verified

If a corporation declares a 2-for-1 stock split, which of the following is true?


A) A new class of stock must be authorized with twice the number of issued shares.
B) The number of outstanding shares is half the number that was outstanding before the split.
C) The number of outstanding shares is twice the number that was outstanding before the split.
D) The number of authorized shares is doubled, while the par value is reduced to half of the pre-split par value.

E) B) and D)
F) All of the above

Correct Answer

verifed

verified

The ____________________ is a preferred stock having a feature that provides for the current stated dividends plus dividends in arrears before any dividends are paid to the common stockholders.

Correct Answer

verifed

verified

cumulative...

View Answer

Cash paid for preferred stock dividends should be shown on the statement of cash flows under:


A) investing activities.
B) financing activities.
C) both investing and financing activities.
D) operating activities

E) A) and B)
F) C) and D)

Correct Answer

verifed

verified

Which of the following is not a characteristic of a corporation?


A) Corporations are organized as a separate legal taxable entity.
B) Ownership is divided into shares of stock.
C) Corporations experience an ease in obtaining large amounts of resources by issuing stock.
D) A corporation's resources are limited to their individual stockholders' resources.

E) None of the above
F) All of the above

Correct Answer

verifed

verified

Fred's Car Repair Service Selected data from the financial statements of Fred's Car Repair Service are provided below. 20122011 Total stockholders’ equity $350,000$265,000 Current liabilities 75,00072,000 Total liabilities & stockholders’ equity 600,000590,000 Cash flow from operations 250,000190,000 Net sales 570,000560,000 Capital expenditures 110,00060,000\begin{array}{lcc}&2012&2011\\\text { Total stockholders' equity } & \$ 350,000 & \$ 265,000 \\\text { Current liabilities } & 75,000 & 72,000 \\\text { Total liabilities \& stockholders' equity } & 600,000 & 590,000 \\\text { Cash flow from operations } & 250,000 & 190,000 \\\text { Net sales } & 570,000 & 560,000 \\\text { Capital expenditures } & 110,000 & 60,000\end{array} - Refer to the selected data provided for Fred's Car Repair Service. Which of the following would result from a vertical analysis of Fred's total stockholders' equity in 2012?


A) Total stockholders' equity increased $85,000 or 42.08% during 2012.
B) The total of liabilities & stockholders' equity is $600,000 in 2012.
C) Total stockholders' equity is 58.33% of total liabilities & stockholders' equity in 2012.
D) Total stockholders' equity is 35.67% of total assets in 2012.

E) A) and D)
F) A) and C)

Correct Answer

verifed

verified

When a corporation declares a cash dividend, which of the following is true?


A) Cash decreases.
B) Liabilities decrease.
C) Equity decreases.
D) No entry is necessary.

E) A) and B)
F) C) and D)

Correct Answer

verifed

verified

The ____________________ ratio is computed by dividing dividends by net income.

Correct Answer

verifed

verified

The excess of sales price of treasury stock over its cost should be credited to:


A) Treasury Stock Receivable
B) Premium on Capital Stock
C) Additional Paid-In Capital
D) Income from Sale of Treasury Stock

E) A) and D)
F) None of the above

Correct Answer

verifed

verified

Denny's Deli, Inc. The stockholders' equity section of the December 31, 2011, balance sheet for Denny's Deli appeared as follows: Denny's Deli, Inc. The stockholders' equity section of the December 31, 2011, balance sheet for Denny's Deli appeared as follows: - Assume that all of the 40,000 shares of Denny's stock that was issued as of December 31, 2011, was issued for $35 per share. On March 1, 2012, Denny reacquired 5,000 shares of its common stock for $43 per share. Refer to the information presented above for Denny's Deli, Inc. What is the total amount of stockholders' equity that will be presented on Denny's March 31, 2012, balance sheet? A) $1,505,000 B) $1,432,000 C) $1,600,000 D) $1,530,000 - Assume that all of the 40,000 shares of Denny's stock that was issued as of December 31, 2011, was issued for $35 per share. On March 1, 2012, Denny reacquired 5,000 shares of its common stock for $43 per share. Refer to the information presented above for Denny's Deli, Inc. What is the total amount of stockholders' equity that will be presented on Denny's March 31, 2012, balance sheet?


A) $1,505,000
B) $1,432,000
C) $1,600,000
D) $1,530,000

E) A) and D)
F) A) and B)

Correct Answer

verifed

verified

If a corporation declares a 2-for-1 stock split, which of the following is true?


A) A journal entry is required to show the effect on the stockholders' equity accounts.
B) The stockholders will have a higher proportionate ownership share after the split.
C) The par value will be reduced to half of the pre-split par value.
D) The market price of the stock is expected to increase after the split.

E) None of the above
F) A) and B)

Correct Answer

verifed

verified

One of the main disadvantages of the corporate form is the:


A) professional management.
B) double taxation of dividends.
C) charter.
D) corporation must issue stock.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Wolfgang, Inc. Selected data from the financial statements of Wolfgang, Inc. are presented below. Wolfgang, Inc. Selected data from the financial statements of Wolfgang, Inc. are presented below. - Refer to the information presented above for Wolfgang, Inc. Wolfgang's 2012 earnings per share is reported as A) $1.08 per share B) $1.20 per share C) $1.30 per share D) $1.44 per share - Refer to the information presented above for Wolfgang, Inc. Wolfgang's 2012 earnings per share is reported as


A) $1.08 per share
B) $1.20 per share
C) $1.30 per share
D) $1.44 per share

E) A) and B)
F) B) and D)

Correct Answer

verifed

verified

Many stockholders choose to invest in preferred stock because:


A) preferred stock can always be converted into common stock at the stockholder's option.
B) the preferred dividend distributions are generally increased each year.
C) dividends are distributed to preferred stockholders before common stockholders.
D) preferred stockholders includes the right to participate in management decisions through voting privileges.

E) None of the above
F) C) and D)

Correct Answer

verifed

verified

Issued stock that is repurchased by the corporation but not retired is ____________________.

Correct Answer

verifed

verified

Coral Cleaners, Inc. Coral Cleaners reported the following information in the stockholders' equity section of its December 31, 2011, balance sheet. Coral Cleaners, Inc. Coral Cleaners reported the following information in the stockholders' equity section of its December 31, 2011, balance sheet. -Refer to the information presented above for Coral Cleaners, Inc. What is the number of shares of common stock issued and outstanding? A) 50,000 shares B) 100,000 shares C) 6,000 shares D) 5,000 shares -Refer to the information presented above for Coral Cleaners, Inc. What is the number of shares of common stock issued and outstanding?


A) 50,000 shares
B) 100,000 shares
C) 6,000 shares
D) 5,000 shares

E) A) and C)
F) A) and B)

Correct Answer

verifed

verified

Petry Corporation issues 20,000 shares of $.50 par common stock for $6 per share. The account for Additional Paid-In Capital in excess of par will increase by:


A) $130,000.
B) $120,000.
C) $110,000.
D) $10,000.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

All of the following are reasons that a corporation may purchase treasury stock except:


A) if it needs the stock for its employee stock bonus program.
B) if it desires to make an investment in its own stock and is reported as an asset.
C) to buy out the ownership of stockholders.
D) to increase the reported amount of earnings per share.

E) A) and B)
F) A) and C)

Correct Answer

verifed

verified

Max's Tire Center Company Selected data from the financial statements of Max's Tire Center are provided below. 20122011 Total stockholders’ equity $350,000$278,000 Current liabilities 45,00042,000 Total liabilities & stockholders’ equity 500,000490,000 Cash flow from operations 350,000290,000 Net sales 370,000360,000 Capital expenditures 150,000130,000\begin{array}{lcc}&2012&2011\\\text { Total stockholders' equity } & \$ 350,000 & \$ 278,000 \\\text { Current liabilities } & 45,000 & 42,000 \\\text { Total liabilities \& stockholders' equity } & 500,000 & 490,000 \\\text { Cash flow from operations } & 350,000 & 290,000 \\\text { Net sales } & 370,000 & 360,000 \\\text { Capital expenditures } & 150,000 & 130,000\end{array} -Refer to the selected data provided for Max's Tire Center. Which of the following would result from a horizontal analysis of Max's total stockholders' equity in 2012?


A) Total stockholders' equity increased $72,000 or 25.9% during 2012.
B) Total stockholders' equity increased $72,000 or 29.5% during 2012.
C) Total stockholders' equity is 70.0% of total assets in 2012.
D) Total liabilities & stockholders' equity is $500,000 in 2012.

E) B) and C)
F) A) and D)

Correct Answer

verifed

verified

Melisch, Inc. The following information is available pertaining to the stockholders' equity accounts for Melisch, Inc. Melisch, Inc. The following information is available pertaining to the stockholders' equity accounts for Melisch, Inc. - Refer to the information presented above for Melisch, Inc. What is the amount of Melisch's retained earnings? A) $98,000 B) $114,000 C) $130,000 D) $860,000 - Refer to the information presented above for Melisch, Inc. What is the amount of Melisch's retained earnings?


A) $98,000
B) $114,000
C) $130,000
D) $860,000

E) A) and C)
F) All of the above

Correct Answer

verifed

verified

Showing 41 - 60 of 103

Related Exams

Exam 1

Financial Accounting

94 Questions

Exam 2

Corporate Financial Statements

97 Questions

Exam 3

Recording Accounting Transactions

102 Questions

Exam 4

Accrual Accounting and Adjusting Entries

101 Questions

Exam 5

Internal Control and Cash

108 Questions

Exam 6

Receivables

96 Questions

Exam 7

Inventory

104 Questions

Exam 8

Fixed Assets and Intangible Assets

90 Questions

Exam 9

Liabilities

89 Questions

Exam 11

Statement of Cash Flows

100 Questions

Exam 12

Financial Statement Analysis

82 Questions

Show Answer