Multiple Choice Question 219
The trial balance of Houston Inc. includes the following balances: Common Stock, $28,000; Paid-in Capital in Excess of Par, $64,000; Treasury Stock, $6,000; Preferred Stock, $30,000. Capital stock totals
Multiple Choice Question 56
A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a
corporation’s temporary accounts are closed at the end of the accounting period.
corporation is organized for the purpose of making a profit.
corporation is subject to more federal and state government regulations.
corporation is an accounting economic entity.
Multiple Choice Question 138
The date on which a cash dividend becomes a binding legal obligation is on the
last day of the fiscal year-end.
date of record.
Multiple Choice Question 207
In the stockholders’ equity section of the balance sheet,
Common Stock Dividends Distributable will be classified as part of additional paid-in capital.
Additional Paid-in Capital appears under the subsection Paid-in Capital.
Dividends in arrears will appear as a restriction of Retained Earnings.
Common Stock Dividends Distributable will appear in its own subsection of the stock- holders’ equity.
Multiple Choice Question 167
When stock dividends are distributed,
Retained Earnings is decreased.
Common Stock Dividends Distributable is decreased.
Paid-in Capital in Excess of Par is debited if it is a small stock dividend.
no entry is necessary if it is a large stock dividend.
Multiple Choice Question 198
A prior period adjustment that corrects income of a prior period requires that an entry be made to
an income statement account.
the retained earnings account.
an asset account.
a current year revenue or expense account.
Multiple Choice Question 58
The concept of an “artificial being” refers to which form of business organization?
Multiple Choice Question 60
The two ways that a corporation can be classified by ownership are
publicly held and privately held.
stock and non-stock.
majority and minority.
inside and outside.
Multiple Choice Question 79
If an investment firm underwrites a stock issue, the
investment firm has guaranteed profits on the sale of the stock.
issuance of stock is likely to be directly to creditors.
risk of being unable to sell the shares stays with the issuing corporation.
corporation obtains cash immediately from the investment firm.
Multiple Choice Question 133
Vega Corporation’s December 31, 2013 balance sheet showed the following:
8% preferred stock, $20 par value, cumulative, 10,000 shares
authorized; 7,500 shares issued$150,000
Common stock, $10 par value, 1,000,000 shares authorized;
975,000 shares issued, 960,000 shares outstanding9,750,000
Paid-in capital in excess of par—preferred stock30,000
Paid-in capital in excess of par—common stock13,500,000
Treasury stock (15,000 shares)315,000
Vega declared and paid a $48,000 cash dividend on December 15, 2013. If the company’s dividends in arrears prior to that date were $10,000, Vega’s common stockholders received
Multiple Choice Question 109
A corporation purchases 20,000 shares of its own $15 par common stock for $30 per share, recording it at cost. What will be the effect on total stockholders’ equity?
Increase by $300,000
Increase by $600,000
Decrease by $300,000
Decrease by $600,000
Multiple Choice Question 234
When the selling price of treasury stock is greater than its cost, the company credits the difference to
Paid-in Capital from Treasury Stock.
Paid-in Capital in Excess of Par.
Gain on of Treasury Stock.
Multiple Choice Question 90
A separate paid-in capital account is used to record each of the following except the issuance of
treasury stock above cost.
par value stock.
stated value stock.
Multiple Choice Question 64
Which of the following statements reflects the transferability of ownership rights in a corporation?
A stockholder must obtain permission from the board of directors before selling shares.
A stockholder must obtain permission from at least three other stockholders before selling shares.
If a stockholder decides to transfer ownership, he must transfer all of his shares.
A stockholder may dispose of part or all of his shares.
Multiple Choice Question 151
Which of the following is not a significant date with respect to dividends?
The incorporation date
The record date
The declaration date
The payment date