Act 272 quiz #1

Which one of the following would not be considered an advantage of the corporate form of organization? Select one: a. Continuous life b. Limited liability of stockholders. c. Separate legal existence d. Double taxation

Which of the following would not be true of a privately held corporation? a. Select one:. It is sometimes called a closely held corporation b. It is usually smaller than a publicly held company. c. Its shares are regularly traded on the New York Stock Exchange d. It does not offer its shares for sale to the general public

Which one of the following is not an ownership right of a stockholder in a corporation? Select one: a. To share in assets upon liquidation b. To declare dividends on the common stock c. To share in corporate earnings d. To vote in the election of directors

Par value Select one: a. represents the original selling price for a share of stock b. represents what a share of stock is worth c. is the value assigned per share in the corporate charter d. is established for a share of stock after it is issued

The amount of stock that may be issued according to the corporation's charter is referred to as the Select one: a. Treasury stock b. Outstanding stock c. Authorized stock d. Issued stock

If Norben Company issues 4,000 shares of $5 par value common stock for $140,000, the account Select one: a. Paid-in Capital in Excess of Par Value will be credited for $120,000 b. Common Stock will be credited for $140,000 c. Paid-in Capital in Excess of Par Value will be credited for $20,000 d. Cash will be debited for $120,000

The Paid-in Capital in Excess of Par Value is increased in the accounting records when Select one: a. capital stock is issued at an amount greater than par value b. the number of shares issued exceeds par value c. the stated value of capital stock is greater than the par value d. the market value of the stock rises above par value

Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $115,000. As a result of this event, Select one: a. All of these answer choices are correct b. Leary's total stockholders' equity decreased $115,000 c. Leary's Paid-in Capital in Excess of Par Value account decreased $65,000 d. Leary's Common Stock account decreased $50,000

A company would not acquire treasury stock Select one: a. as an asset investment b. in order to reissue shares to officers c. to have additional shares available to use in acquisitions of other companies d. in order to increase trading of the company's stock

Dividends in arrears on cumulative preferred stock Select one: a. must be paid before common stockholders can receive a dividend b. never have to be paid, even if common dividends are paid c. enable the preferred stockholders to share equally in corporate earnings with the common stockholders d. should be recorded as a current liability until they are paid

Outstanding stock of the West Corporation included 40,000 shares of $5 par common stock and 10,000 shares of 6%, $10 par non-cumulative preferred stock. In 2013, West declared and paid dividends of $4,000. In 2014, West declared and paid dividends of $12,000. How much of the 2014 dividend was distributed to preferred shareholders? Select one: a. $8,000 b. $6,000 c. $14,000 d. None of these answer choices are correct

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to Select one: a. increase total expenses and total liabilities b. increase total assets and stockholders' equity c. decrease total liabilities and stockholders' equity d. decrease total assets and stockholders' equity.

The board of directors of Yancey Company declared a cash dividend of $1.50 per share on 42,000 shares of common stock on July 15, 2014. The dividend is to be paid on August 15, 2014, to stockholders of record on July 31, 2014. The correct entry to be recorded on July 15, 2014, will include a Select one: a. debit to Retained Earnings b. credit to Cash c. debit to Dividends Payable d. credit to Retained Earnings