Question 1

When shares are traded on the secondary market it means

Accepted Answer

A)  it's the first time a corporation's shares are offered for sale to the public.
B)  that the public can purchase shares directly from the company.
C)  that investors can purchase and sell shares from each other using a stock exchange.
D)  that this is the same thing as an initial public offering.E) A) and B)
F) None of the above

Question 2

Comprehensive income/(loss)  includes

Accepted Answer

A)  net income/(loss) and accumulated other comprehensive income/(loss) .
B)  net income/(loss) and other comprehensive income/(loss) .
C)  other comprehensive income/(loss) and accumulated other comprehensive income/(loss) .
D)  other comprehensive income/(loss) only.E) A) and B)
F) A) and C)

Question 3

Use the following information for questions 
On July 15, 2022, the board of directors of George Easton Limited declared a cash dividend of $0.50 per share on 84,000 common shares.The dividend is to be paid on August 15, 2022, to shareholders of record on July 31, 2022.
-The correct entry to be recorded on August 15, 2022 will include a

Accepted Answer

A)  debit to Dividends Declared.
B)  credit to Retained Earnings.
C)  credit to Dividends Payable.
D)  debit to Dividends Payable.E) None of the above
F) B) and C)

Question 4

For a corporation reporting under IFRS, when shares are issued for a noncash consideration and a ready market for the shares exists, they are recorded at

Accepted Answer

A)  zero.
B)  the fair value of the shares.
C)  the fair value of the assets acquired.
D)  the average of the fair value of the shares and the fair value of the assets acquired.E) None of the above
F) All of the above

Question 5

All of the following are advantages of the corporate form of organization except

Accepted Answer

A)  government regulation.
B)  reduced income tax.
C)  ease of transfer of ownership.
D)  continuous life.E) B) and C)
F) A) and D)

Question 6

Use the following information for questions 
On January 1, BearBack Corporation had 300,000 common shares issued.On April 10, the company declared a 10% stock dividend to be distributed on April 30.The market value of the shares was $7 on April 10 and $10 on April 30.
-The entry to record the transaction of April 30 would include a

Accepted Answer

A)  credit to Cash for $210,000.
B)  debit to Stock Dividends Distributable for $210,000.
C)  credit to Retained Earnings for $300,000.
D)  debit to Dividends Declared for $210,000.E) None of the above
F) C) and D)

Question 7

Most companies in Canada have an unlimited number of authorized shares.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following usually represents the largest number of common shares?

Accepted Answer

A)  restricted shares.
B)  issued shares.
C)  treasury shares.
D)  authorized shares.E) A) and D)
F) B) and D)

Question 9

The statement of changes in equity discloses changes in total shareholders' equity for the period as well as changes in each shareholders' equity account.

Accepted Answer

A) True 
 B)False

Question 10

Those most responsible for the major policy decisions of a corporation are the

Accepted Answer

A)  shareholders.
B)  board of directors.
C)  management.
D)  employees.E) A) and C)
F) A) and B)

Question 11

The sale of common shares should be recorded as a

Accepted Answer

A)  debit to Retained Earnings and a credit to Cash.
B)  debit to Cash and a credit to Retained Earnings.
C)  debit to Cash and a credit to Common Shares.
D)  debit to Common Shares and a credit to Cash.E) C) and D)
F) B) and C)

Question 12

Irwin Inc.had 300,000 common shares before a stock split occurred and 600,000 shares after the stock split.The stock split was

Accepted Answer

A)  1 for 2.
B)  4 for 1.
C)  1 for 4.
D)  2 for 1.E) B) and C)
F) A) and C)

Question 13

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

Accepted Answer

A) True 
 B)False

Question 14

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Accepted Answer

A)  Stock Dividends Distributable.
B)  Common Shares.
C)  Share Capital.
D)  Dividends Declared.E) C) and D)
F) A) and D)

Question 15

Which of the following would not be true of a privately held corporation?

Accepted Answer

A)  It is sometimes called a closely held corporation.
B)  Its shares are regularly traded on the Toronto Stock Exchange.
C)  It does not offer its shares for sale to the general public.
D)  It is usually smaller than a publicly held company.E) B) and D)
F) A) and D)

Question 16

Apricot Inc.is repurchasing 25,000 common shares.The price is $4.25/share and the average price is $4.00.Assuming that there is a contributed surplus balance of $5,000, the entry to record the transaction would be

Accepted Answer

A)  debit to Common shares, Contributed Surplus, and Retained Earnings and credit to Cash
B)  debit to Common shares and Contributed Surplus and credit to Cash
C)  debit to Common shares and Retained Earnings and credit to Cash
D)  debit to Common shares and credit to CashE) B) and D)
F) A) and B)

Question 17

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Accepted Answer

A) True 
 B)False

Question 18

The disclosure of earnings per share is

Accepted Answer

A)  not required to be reported under ASPE or IFRS.
B)  not required to be reported under IFRS.
C)  required to be reported under ASPE.
D)  required to be reported under IFRS.E) None of the above
F) A) and C)

Question 19

A debit balance in the Retained Earnings account is called a deficit.

Accepted Answer

A) True 
 B)False

Question 20

Baria Inc.is repurchasing 10,000 common shares.The price is $5.00/share and the average price is $5.10.Assuming that there is a contributed surplus balance of $5,000, which accounts will be affected by the transaction?

Accepted Answer

A)  Common shares, Contributed Surplus, Retained Earnings and Cash
B)  Common shares, Contributed Surplus and Cash
C)  Common shares, Retained Earnings and Cash
D)  Common shares and CashE) A) and B)
F) B) and D)

Exam 11: Reporting and Analyzing Shareholders Equity

The disclosure of earnings per share is

Correct Answer
verified

Baria Inc.is repurchasing 10,000 common shares.The price is $5.00/share and the average price is $5.10.Assuming that there is a contributed surplus balance of $5,000, which accounts will be affected by the transaction?

Correct Answer
verified

Comprehensive income/(loss) includes

Correct Answer
verified

For a corporation reporting under IFRS, when shares are issued for a noncash consideration and a ready market for the shares exists, they are recorded at

Correct Answer
verified

Correct Answer
verified

When shares are traded on the secondary market it means

Correct Answer
verified

Most companies in Canada have an unlimited number of authorized shares.

Correct Answer
verified

Those most responsible for the major policy decisions of a corporation are the

Correct Answer
verified

Correct Answer
verified

A debit balance in the Retained Earnings account is called a deficit.

Correct Answer
verified

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Correct Answer
verified

Apricot Inc.is repurchasing 25,000 common shares.The price is $4.25/share and the average price is $4.00.Assuming that there is a contributed surplus balance of $5,000, the entry to record the transaction would be

Correct Answer
verified

All of the following are advantages of the corporate form of organization except

Correct Answer
verified

Irwin Inc.had 300,000 common shares before a stock split occurred and 600,000 shares after the stock split.The stock split was

Correct Answer
verified

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

Correct Answer
verified

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Correct Answer
verified

The statement of changes in equity discloses changes in total shareholders' equity for the period as well as changes in each shareholders' equity account.

Correct Answer
verified

The sale of common shares should be recorded as a

Correct Answer
verified

Which of the following usually represents the largest number of common shares?

Correct Answer
verified

Which of the following would not be true of a privately held corporation?

Correct Answer
verified

Exam 11: Reporting and Analyzing Shareholders Equity

The disclosure of earnings per share is

Correct AnswerverifiedShow Answer

Baria Inc.is repurchasing 10,000 common shares.The price is $5.00/share and the average price is $5.10.Assuming that there is a contributed surplus balance of $5,000, which accounts will be affected by the transaction?

Correct AnswerverifiedShow Answer

Comprehensive income/(loss) includes

Correct AnswerverifiedShow Answer

For a corporation reporting under IFRS, when shares are issued for a noncash consideration and a ready market for the shares exists, they are recorded at

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When shares are traded on the secondary market it means

Correct AnswerverifiedShow Answer

Most companies in Canada have an unlimited number of authorized shares.

Correct AnswerverifiedShow Answer

Those most responsible for the major policy decisions of a corporation are the

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A debit balance in the Retained Earnings account is called a deficit.

Correct AnswerverifiedShow Answer

Cash dividends are not a liability of the corporation until they are declared by the board of directors.

Correct AnswerverifiedShow Answer

Apricot Inc.is repurchasing 25,000 common shares.The price is $4.25/share and the average price is $4.00.Assuming that there is a contributed surplus balance of $5,000, the entry to record the transaction would be

Correct AnswerverifiedShow Answer

All of the following are advantages of the corporate form of organization except

Correct AnswerverifiedShow Answer

Irwin Inc.had 300,000 common shares before a stock split occurred and 600,000 shares after the stock split.The stock split was

Correct AnswerverifiedShow Answer

The market capitalization of a company is calculated by multiplying the number of shares authorized by the share price at any given date.

Correct AnswerverifiedShow Answer

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Correct AnswerverifiedShow Answer

The statement of changes in equity discloses changes in total shareholders' equity for the period as well as changes in each shareholders' equity account.

Correct AnswerverifiedShow Answer

The sale of common shares should be recorded as a

Correct AnswerverifiedShow Answer

Which of the following usually represents the largest number of common shares?

Correct AnswerverifiedShow Answer

Which of the following would not be true of a privately held corporation?

Correct AnswerverifiedShow Answer

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