Details of this Paper

With respect to a corporation, select the statement that is correct.

Description

solution


Question

With respect to a corporation, select the statement that is correct.;a. Its organization requires an approved charter which is governed by state law.;b. Ownership rights to the corporation are transferable.;c. A corporation is a separate legal entity from its owners.;d. Stockholders have limited liability.;e. All of the above are correct.;Save Answer;2.;(Points: 1);Which of the following represents the shares currently in the hands of investors?;a. Authorized shares;b. Issued shares;c. Outstanding shares;d. Unissued shares;e. Treasury shares;Save Answer;3.;(Points: 1);The par value of common stock is the;a. average market price of the stock during the period in which it is sold.;b. ceiling (maximum) amount above which the stock may not be sold initially.;c. floor (minimum) amount below which the stock may not be sold initially.;d. selling price of the stock at the date it was issued by the corporation.;e. same as the market value for the stock on the date of issue.;Save Answer;4.;(Points: 1);Vaughan Company has one class of capital stock issued. It is;a. common stock.;b. preferred stock, voting.;c. preferred stock, noncumulative.;d. common stock, nonvoting.;e. None of the above is correct.;Save Answer;5.;(Points: 1);If Lynch Corporation sells and issues 100 shares of its $10 par value common stock at $11 per share, the entry to record the sale will not include a;a. Debit to Cash of $1,100.;b. Credit to Contributed capital in excess of par of $100.;c. Credit to Common stock of $1,000.;d. Credit to Retained earnings of $100.;e. All of the above would be included.;Save Answer;6.;(Points: 1);The conversion feature on convertible preferred stock enables the stockholder to convert it to;a. convertible bonds.;b. cash.;c. common stock.;d. products of the company.;e. dividends in arrears.;Save Answer;7.;(Points: 1);Choose the correct definition for par value from the following;a. The amount that a corporation must pay when it exercises its right to convert shares of stock.;b. The equity of one share of outstanding stock in the issuing corporation's net assets as recorded in the corporation's accounts.;c. An arbitrary value placed on a share of stock at the time the stock is authorized in the corporate charter.;d. The costs of bringing a corporation into existence, such as legal fees, promotor's fees, and amounts paid to the state to secure a charter.;Save Answer;8.;(Points: 1);Guest Corporation issued (sold) 1,000 shares of its no par common stock for $110 per share. The bylaws established a stated value of $100 per share. The transaction is recorded as an increase in contributed capital of;a. $ 100,000.;b. $ 110,000.;c. $1,000,000.;d. $1,100,000.;e. None of the above is correct.;Save Answer;9.;(Points: 1);Which of the following statements is true?;a. An initial public offering (IPO) occurs when the company first offers their stock for sale to the public.;b. A seasoned new issue is the term used for any additional sales of new stock to the public after the IPO.;c. An underwriter, usually an investment banker, advises the corporation on matters concerning the sale of shares of stock and helps to market those shares for a fee.;d. A and B are true.;e. All of the above are true.;Save Answer;10.;(Points: 1);Shares of stock eligible for dividends are;a. the number of shares of authorized.;b. the number of shares issued.;c. the number of shares outstanding.;d. the number of treasury shares.;e. none of the above.;Save Answer;11.;(Points: 1);The declaration and payment of a cash dividend;a. reduces retained earnings and increases liabilities by the amount of the dividend.;b. reduces retained earnings and increases contributed capital by the same amount.;c. reduces assets and increases liabilities each by the amount of the dividend.;d. reduces assets and retained earnings each by the amount of the dividend.;e. None of the above is correct.;Save Answer;12.;(Points: 1);Retained earnings;a. is an asset.;b. has a debit balance for a successful corporation.;c. represents the future dividend liability of the company.;d. represents the income that has been earned by the company, less any dividends declared since the first day of operations.;e. is presented on the Statement of Cash Flows.;Save Answer;13.;(Points: 1);At the end of 20C, Allen Corporation reported a retained earnings credit balance of $50,000. During 20D, Allen reported the following amounts: Cash dividends declared and paid $15,000, net income of $35,000, and a $5,000 prior period adjustment (debit). The 20D ending balance of total retained earnings was;a. $75,000.;b. $70,000.;c. $65,000.;d. $60,000.;e. None of the above is correct.;Save Answer;14.;(Points: 1);Which of the following accounts would appear in the general ledger of a partnership?;a. Retained earnings account.;b. Dividends paid account.;c. Common stock accounts.;d. Drawings accounts.;e. None of the above.;Save Answer;15.;(Points: 1);The statement of cash flows reports directly on the;a. financial position of the business.;b. accrual basis in accordance with GAAP.;c. causes of the inflows and outflows of cash.;d. financial operating performance of the business.;e. None of the above is correct.;Save Answer;16.;(Points: 1);Which of the following transactions would not create a cash flow?;a. The company purchased some of its own stock from a stockholder.;b. Amortization of patent for the period.;c. Payment of a cash dividend.;d. Sale of equipment at book value (i.e. no gain or loss).;e. None of the above is correct.;Save Answer;17.;(Points: 1);Which of the following transactions is not a direct source of cash?;a. Disposal of inventory for cash.;b. Borrowing cash.;c. Sale and issuance of capital stock for cash.;d. Sale of services for cash.;e. All of the above are direct sources of cash.;Save Answer;18.;(Points: 1);Which of the following transactions is not a direct use of cash?;a. Acquisition of inventory for cash.;b. Exchanges of bonds payable for land.;c. Purchase of treasury stock with cash.;d. Cash dividend paid.;e. All of the above are direct uses of cash.;Save Answer;19.;(Points: 1);Which of the following transactions is not a source of cash?;a. Cash sales of merchandise.;b. Sale and issuance of capital stock for cash.;c. Short-term borrowing of cash.;d. Sale of operational assets for cash.;e. All of the above are typical sources of cash.;Save Answer;20.;(Points: 1);Common stockholders have the right to;a. sell their stock.;b. share in any dividends distributed to common stockholders.;c. have the first opportunity to purchase any additional shares of common stock issued by the corporation.;d. vote at stockholders' meetings.;e. All of the above are true.;Save Answer;21.;(Points: 1);Which of the following would not be a cash flow from investing activities?;a. Purchase of long-term investments.;b. Sale of a patent.;c. Collection of principal of a note receivable.;d. Collection of interest revenue on a long-term note.;e. None of the above is correct.;Save Answer;22.;(Points: 1);Which of the following would not be a cash flow from financing activities?;a. Issuance of common stock.;b. Borrowing on a long-term note payable.;c. Collection of a cash dividend.;d. Repayment of principal on a long-term note payable.;e. None of the above is correct.;Save Answer;23.;(Points: 1);Which of the following is a cash flow from operating activities?;a. Purchase of merchandise for resale.;b. Sale of a piece of land no longer used in operations.;c. Sale of long-term investments in common stock.;d. Payment of a note payable.;e. None of the above is correct.;Save Answer;24.;(Points: 1);A cash inflow from financing activities includes;a. proceeds from selling investments in equity securities of another company.;b. proceeds from selling equipment.;c. proceeds from issuance of bonds payable.;d. receipt of interest payments.;e. None of the above is correct.;Save Answer;25.;(Points: 1);The statement of cash flows (indirect method) reports depreciation expense as an addition to net income because depreciation;a. causes an inflow of funds for the replacement of assets.;b. reduces reported net income of the period but does not involve an outflow of cash for that period.;c. is a direct use of cash.;d. reduces reported net income and causes an inflow of cash.;e. None of the above is correct.;Save Answer;26.;(Points: 1);When a company prepares a bond indenture, certain provisions of the bonds are included. Which of the following are not provisions specified in the indenture?;a. Dates of interest payments.;b. Rate of interest to be paid.;c. Maturity date.;d. Cash to be received at the issue date.;e. All of the above are specified in the indenture.;Save Answer;27.;(Points: 1);Positive financial leverage occurs when;a. interest payments can be deducted for income tax purposes.;b. the company's after-tax return on total assets is less than the after-tax cost of borrowing.;c. the return to the owners is enhanced through the use of debt financing.;d. payment of resources to creditors is limited to the required interest payments while the return of the principal borrowed is not required.;e. None of the above is correct.;Save Answer;28.;(Points: 1);Bonds payable usually are classified on the balance sheet as;a. long-term liabilities.;b. current liabilities.;c. investments and funds.;d. current assets.;e. None of the above is correct.;Save Answer;29.;(Points: 1);The annual interest rate specified on a bond (which is based on the maturity amount of the bond) appropriately can be called the;a. stated rate.;b. nominal rate.;c. coupon rate.;d. contract rate.;e. A through D are all acceptable terms.;Save Answer;30.;(Points: 1);Which of the following statements is correct?;a. Bonds are always issued (sold) at their par value.;b. Bonds issued at more than par value are said to be issued at a discount.;c. Once bonds are issued, the bonds will trade in the bond market above or below par depending on changes in interest rates.;d. Bondholders must hold their bonds to maturity to receive cash for their investment.;e. None of the above is correct.;Save Answer;31.;(Points: 1);On July 1, 20A, Wilson Company issued $300,000, five-year, 9% bonds at 103. The reason Wilson issued the bonds at a premium was;a. the stated rate of interest was higher than the rate being paid on investments with comparable risk.;b. the stated rate of interest was the same as the rate being paid on investments with comparable risk.;c. the stated rate of interest was lower than the rate being paid on investments with comparable risk.;d. the bonds were callable.;e. None of the above is correct.;Save Answer;32.;(Points: 1);Deany Company issued $100,000 bonds. The stated rate of interest was 8% and the market rate 9%. Which of the following statements is true?;a. The bonds were issued at a premium.;b. Annual interest expense will exceed the company's actual cash payments for interest.;c. Annual interest expense will be $8,000.;d. Deany Company cannot issue bonds if the market rate is higher than the stated rate.;e. None of the above is correct.;Save Answer;33.;(Points: 1);If a bond is sold at 98, its stated rate of interest would be;a. higher than the market rate.;b. lower than the market rate.;c. equal to the market rate.;d. unrelated to the market rate.;e. None of the above is correct.;Save Answer;34.;(Points: 1);Ratios are most useful for analysis when;a. used alone.;b. compared with historical ratios of the same company.;c. compared with ratios for other companies in the industry.;d. Both B and C are correct.;e. All of the above are correct.;Save Answer;35.;(Points: 1);The base amount in preparing a common-size income statement is usually;a. cost of goods sold.;b. gross profit.;c. net income.;d. net sales.;e. All of the above are appropriate.;Save Answer;36.;(Points: 1);The Able Company had net income of $47,500 and earnings per share of $3.17 during 20B. On December 31, 20B, the stock had a market price of $18.50 per share. What is Able's price/earnings ratio?;a. 25.70.;b. 8.11.;c. 5.84.;d. 0.17.;e. None of the above is correct.;Save Answer;37.;(Points: 1);Perot Company had income before interest and taxes of $120,000. Interest expense for the period was $17,000 and income taxes amounted to $28,500. The average stockholders' equity was $680,000. What is Perot's return on equity?;a. 17.65%.;b. 15.15%.;c. 13.46%.;d. 10.96%.;e. None of the above is correct.;Save Answer;38.;(Points: 1);A business must maintain a sufficient amount of working capital to;a. meet current debts;b. carry adequate inventories;c. take advantage of cash discounts;d. to maintain liquidity.;e. All of the above are correct.;Save Answer;39.;(Points: 1);Crusader Company reported the following amounts in the 20A balance sheet;Total assets $330,000;Total liabilities $100,000;Common stock, par value $9 (no preferred stock) $90,000;The book value of the common stock was;a. $11.;b. $20.;c. $33.;d. $22.;e. None of the above is correct.;Save Answer;40.;(Points: 1);At the end of 20B, Storage Company reported outstanding common stock (par $20) of $300,000. Total liabilities were $440,000 and total assets were $860,000. The company had no preferred stock. The book value per share of common stock was;a. $29.00.;b. $13.90.;c. $28.00.;d. $14.00.;e. None of the above is correct.;Save Answer;41.;(Points: 1);Bailey Corporation reported the following information for 20A;Net income $10,000;Total assests $16,000;Total stockholders' equity $8,000;Morgan's debt/equity ratio was;a..33 or 33%.;b. 1.25 or 125 %.;c. 1.0 or 100%.;d. 3.0 or 300%.;e. None of the above is correct.;Save Answer;42.;(Points: 1);Shore Company reported income before extraordinary items of $25,000, total liabilities of $150,000, and total stockholders' equity of $100,000. The return on assets was;a. 10%.;b. 25%.;c. 16.67%.;d. Cannot be determined from the data given.;e. None of the above is correct.;Save Answer;43.;(Points: 1);If the current (working capital) ratio is 2 to 1, the payment of a cash dividend, which was recorded as a liability on the date of declaration, will;a. increase the current ratio.;b. decrease the current ratio.;c. have no effect on the current ratio.;d. invalidate earnings per share.;e. None of the above is correct.;Save Answer;44.;(Points: 1);The records of ZZZZ Better Corporation include the following;Average total assets $60,000;Average total liabilities $45,000;Total revenue $107,600;Total expense (including income tax) $104,000;The return on equity is (round to the nearest percent);a. 13%.;b. 6%.;c. 24%.;d. 6%.;e. None of the above is correct.;Save Answer;45.;(Points: 1);An important measure of the average movement of goods "on and off the shelf" of a company is the;a. Profit margin.;b. Price/earnings ratio.;c. Inventory turnover ratio.;d. Gross inventory ratio.;e. None of the above is correct.;Save Answer;46.;(Points: 1);Book value per common share;a. usually is a good indicator of the market value of the common stock.;b. is a good measure of management performance.;c. is usually greater than the market value per share.;d. is a measure of liquidity.;e. is not widely used in assessing the future dividend potential of the corporation.;Save Answer;47.;(Points: 1);Which of the following ratios is NOT a test of liquidity?;a. Receivable turnover.;b. Cash ratio.;c. Current ratio.;d. Quick ratio.;e. All of the above are tests of liquidity.;Save Answer;48.;(Points: 1);Which of the following ratios is not a test of solvency?;a. Debt to equity ratio.;b. Owners' equity to total equity ratio.;c. Creditors' equity to total equity ratio.;d. Earnings per share ratio.;e. All of the above are tests of solvency.;Save Answer;49.;(Points: 1);Which of the following ratios is not an indicator of a company's short-term financial strength?;a. Price/earnings ratio.;b. Receivable turnover.;c. Working capital ratio.;d. Quick ratio.;e. All of the above are indicators of the current position.;Save Answer;50.;(Points: 1);Which of the following ratios usually is not considered to be a test of profitability?;a. Current ratio.;b. Profit margin.;c. Return on assets.;d. Earnings per share.;e. None of the above is correct.;Save Answer

 

Paper#26170 | Written in 18-Jul-2015

Price : $32
SiteLock