FIN 534 Quiz 3;Question 1;Which one of the following is not an ownership right of a stockholder in a corporation?;To share in assets upon liquidation.;To share in corporate earnings.;To declare dividends on the common stock.;To vote in the election of directors.;Question 2;A corporation has the following account balances: Common stock, $1 par value, $30,000, Paid-in Capital in Excess of Par Value, $1,350,000. Based on this information, the;average price per share issued is $4.60.;number of shares outstanding are 1,380,000.;number of shares issued are 30,000.;legal capital is $1,380,000.;Question 3;If stock is issued for a noncash asset, the asset should be recorded on the books of the corporation at;fair market value.;a nominal amount.;cost.;zero.;Question 4;Which of the following represents the largest number of common shares?;Outstanding shares;Treasury shares;Issued shares;Authorized shares;Question 5;A corporation purchases 20,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders' equity?;Increase by $400,000;Increase by $700,000;Decrease by $700,000;Decrease by $400,000;Question 6;The acquisition of treasury stock by a corporation;has no effect on total assets and total stockholders' equity.;requires that a gain or loss be recognized on the income statement.;increases its total assets and total stockholders' equity.;decreases its total assets and total stockholders' equity.;Question 7;Which of the following is not a right or preference associated with preferred stock?;First claim to dividends.;Preference to corporate assets in case of liquidation.;The right to vote.;To receive dividends in arrears before common stockholders receive dividends.;Question 8;If preferred stock is cumulative, the;preferred dividends not declared in a given year are called dividends in arrears.;preferred shareholders and the common shareholders receive equal dividends.;preferred shareholders and the common shareholders receive the same total dollar amount of dividends.;common shareholders will share in the preferred dividends.;Question 9;When common stock is issued for services or non-cash assets, cost should be;either the fair market value of the consideration given up or the consideration received, whichever is more clearly evident.;the book value of the common stock issued.;only the fair market value of the consideration given up.;only the fair market value of the consideration received.;Question 10;Common Stock Dividends Distributable is classified as a(n);asset account.;stockholders' equity account.;expense account.;liability account.;Question 11;Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections;Total Assets Total Liabilities Total Stockholders' Equity;Increase Decrease No change;Decrease No change Increase;No change Increase Decrease;Decrease Increase Decrease;Question 12;Which of the following show the proper effect of a stock split and a stock dividend?;Item Stock Split Stock Dividend;Total paid-in capital Increase Increase;Total retained earnings Decrease Decrease;Total par value (common) Decrease Increase;Par value per share Decrease No change;Question 13;Restricting retained earnings for the cost of treasury stock purchased is a;legal restriction.;contractual restriction.;stock restriction.;voluntary restriction.;Question 14;Retained earnings are occasionally restricted;to set aside cash for dividends.;due to contractual loan restrictions.;to keep the legal capital associated with paid-in capital intact.;if preferred dividends are in arrears;Question 15;Prior period adjustments;may only decrease retained earnings.;do not affect retained earnings.;may only increase retained earnings.;may either increase or decrease retained earnings.
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