Stockholder's rights?
1. The right to vote in the election for the board of directors
2. The right to share in dividends
3. The preemptive right
4. The right to share in assets upon liquidation in proportion
Which of the following is not a stockholder's right?
The right to participate in management decisions
Which of the following is true with regard to corporate formations and corporate ownership? (4)
1. A corporation can issue common stock with a par value that determines the stock's legal capital.
2. A corporation can issue common stock directly to investors, and this tends to occur among closely held corporations.
3. The New York Stock Exchange is o
Which of the following is false with regards to corporations?
Privately held corporations tend to have more shareholders than publicly traded corporations.
Corporations have several officers who manage the corporation. One such officer is the controller. The controller? (3)
1. maintains the corporation's accounting records
2. Maintains systems of internal controls,
3. prepares its financial statements, tax returns, and internal reports.
**Is the chief accounting officer
The treasurer does what?
Has custody of the corporation's funds and maintains the company's cash position.
Corporations have several officers who manage the corporation. One such officer is the chief executive officer. The chief executive officer
Has overall responsibility for managing the business.
Which of the following represents the amount that must be retained in the business for the protection of corporate creditors?
Legal capital
If everything else is held constant, what will cause earnings per share to increase?
The purchase of treasury stock
Which one of the following statements is incorrect?
Dividends may be paid on common stock while dividends are in arrears on preferred stock.
If a corporation has incurred a net loss, which of the following is true?
Debited to Retained Earnings in a closing entry
Which of the following accounts is listed first in the stockholders' equity section of the balance sheet?
Preferred stock if preferred stock had been issued. Otherwise, common stock is listed first?
Which one of the following decreases when a corporation purchases treasury stock?
Outstanding shares
Which statement about stock dividends is true?
Stock dividends do not change total stockholders' equity.
Which one of the following is not true concerning a retained earnings restriction?
It is reported as a loss on the income statement.
In the stockholders' equity section of the balance sheet, where and how is treasury stock reported?
It is reported as a deduction appearing after both total paid-in capital and retained earnings.
Which of the following is a stockholder's right? (4)
(i) to vote in the election of the board of directors,
(ii) to share in corporate earnings through receipt of dividends,
(iii) to keep the same percentage ownership when new shares are issued (i.e., preemptive right),
(iv) share in assets upon liquidation
Which one of the following is not a right of preferred stockholders?
Priority voting rights
Which event does not require a journal entry?
1. The record date of a cash dividend
2. Stock Split
Dividends are generally reported...?
Quarterly as a dollar amount per share
The declaration of cash dividend...?
commits the corporation to a binding legal obligation
For a corporation to pay a cash dividend, it needs what 3 things?
1. Retained earnings
2. Adequate cash
3. Declared dividends
Which of the following does not affect retained earnings?
Additional investments by stockholders
Where is common stock listed in the stockholders' equity section of the balance sheet?
As part of paid-in capital
What method is normally used to account for treasury stock?
Cost method
The two ways that a corporation can be classified based on their ownership are
publicly held and privately held
For what reason might a company acquire treasury stock?
To reissue the shares to officers and employees under bonus and stock compensation plans
Which one of the following is true with regard to a corporation's stock?
The number of authorized shares equals or exceeds the number of outstanding shares.
Which of the following is a feature associated with preferred stock?
1. Dividends in arrears are not considered to be a liability
2. Preference to assets in the event of liquidation
3. Cumulative dividends
4. Dividend preference
Market Value
Is the selling price of a share of stock on a given day.
Stated Value
Is a value assigned to no-par stock by the board of directors.
Which of these statements is false?
Legal capital is intended to protect stockholders.
Which of the following is a characteristic of partnerships?
Limited Life
Which of the following is a characteristic of Sole Proprietorships?
Low Taxation
On which dates are entries for cash dividends required?
Declaration date and the payment date
Forming a corporation does not necessarily involve
Incurring debt
Which of the following represents the maximum number of shares a corporation can issue?
Authorized shares
Par Value Stock
Capital Stock that has been assigned a value per share in the corporate charter
Stock Split
The issuance of additional shares of stock to stockholders accompanied by a reduction in the par or stated value per share
A stock split results in...?
Reduction in the par or stated value per share