Question 1

If a company has expenses that are more than revenues,the net loss decreases retained earnings.

Accepted Answer

A) True 
 B)False

Question 2

Common stock is listed before preferred stock in the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

Authorized stock is the number of shares that have been sold to investors.

Accepted Answer

A) True 
 B)False

Question 4

The Surf's Up issues 1,000 shares of 6%,$100 par value preferred stock at the beginning of 2014.All remaining shares are common stock.The company was not able to pay dividends in 2014,but plans to pay dividends of $18,000 in 2015.Assuming the preferred stock is noncumulative,how much of the $18,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholders in 2015?

Accepted Answer

The answer of The Surf's Up issues 1,000 shares of...

Question 5

Authorized common stock refers to the total number of shares:

Accepted Answer

A)  Outstanding.
B)  Issued.
C)  Issued and outstanding.
D)  That can be issued.E) B) and D)
F) B) and C)

Question 6

Return on equity is calculated as:

Accepted Answer

A)  Net income divided by average stockholders' equity.
B)  Net income divided by ending stockholders' equity.
C)  Net income divided by average market value of equity.
D)  Net income divided by ending market value of equity.E) All of the above
F) A) and B)

Question 7

Environmental Designs issues 10,000 shares of its $1 par value common stock at $25 per share.(1)Record the issuance of the stock.(2)Record the issuance of the stock assuming it is no-par value stock.

Accepted Answer

The answer of Environmental Designs issues 10,000 shares of its...

Question 8

The stockholders' equity section in the balance sheet shows:

Accepted Answer

A)  The ending balance in each stockholders' equity account.
B)  How each equity account changed over time.
C)  The average balance in each stockholders' equity account.
D)  More information than the statement of stockholders' equity.E) A) and B)
F) A) and C)

Question 9

Treasury stock is a contra-equity account since treasury stock increases total stockholders' equity.

Accepted Answer

A) True 
 B)False

Question 10

Earnings per share (EPS)

Accepted Answer

A)  Is useful in comparing earnings performance across companies.
B)  Is useful in comparing earnings performance for the same company over time.
C)  Is useful in both comparing earnings performance across companies and in comparing earnings performance for the same company over time.
D)  Is not useful in comparing earnings performance across companies or in comparing earnings performance for the same company over time.E) A) and B)
F) A) and C)

Question 11

Explain the difference between authorized,issued,and outstanding shares.

Accepted Answer

Authorized stock is the total number of ...

Question 12

The correct order from the smallest number of shares to the largest number of shares is:

Accepted Answer

A)  Authorized,issued,and outstanding.
B)  Outstanding,issued,and authorized.
C)  Issued,outstanding,and authorized.
D)  Issued,authorized,and outstanding.E) A) and D)
F) A) and C) B

Question 13

The par value of common stock represents:

Accepted Answer

A)  The amount received when the stock was issued.
B)  The liquidation value of a share.
C)  The market value of a share of stock.
D)  The legal capital per share of stock assigned when the corporation was first established.E) C) and D)
F) None of the above

Question 14

The disadvantages of the corporate form of business include:

Accepted Answer

A)  Ability to transfer ownership.
B)  Additional taxes.
C)  Limited liability.
D)  Ability to raise capital.E) B) and C)
F) C) and D) B

Question 15

Retained earnings represent the earnings retained in the corporation - earnings not paid out as dividends to stockholders.

Accepted Answer

A) True 
 B)False

Question 16

Treasury stock is the repurchase of a company's own issued stock.

Accepted Answer

A) True 
 B)False

Question 17

The Common Stock account on a company's balance sheet is measured as:

Accepted Answer

A)  The number of common shares outstanding x the stock's par value per share.
B)  The number of common shares outstanding x the stock's current market value per share.
C)  The number of common shares issued x the stock's par value per share.
D)  The number of common shares issued x the stock's current market value per share.E) None of the above
F) A) and B)

Question 18

Which of the following is not a potential feature of preferred stock?

Accepted Answer

A)  Convertible.
B)  Redeemable.
C)  Cumulative.
D)  They all are potential features of preferred stock.E) B) and D)
F) A) and C)

Question 19

A stock split has no effect on the total of any account in stockholders' equity.

Accepted Answer

A) True 
 B)False  True

Question 20

Assets plus liabilities equal stockholders' equity.

Accepted Answer

A) True 
 B)False

Exam 10: Stockholders Equity

If a company has expenses that are more than revenues,the net loss decreases retained earnings.

Correct Answer
verified

Common stock is listed before preferred stock in the balance sheet.

Correct Answer
verified

Authorized stock is the number of shares that have been sold to investors.

Correct Answer
verified

Correct Answer
verified

Authorized common stock refers to the total number of shares:

Correct Answer
verified

Return on equity is calculated as:

Correct Answer
verified

Environmental Designs issues 10,000 shares of its $1 par value common stock at $25 per share.(1)Record the issuance of the stock.(2)Record the issuance of the stock assuming it is no-par value stock.

Correct Answer
verified

The stockholders' equity section in the balance sheet shows:

Correct Answer
verified

Treasury stock is a contra-equity account since treasury stock increases total stockholders' equity.

Correct Answer
verified

Earnings per share (EPS)

Correct Answer
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Explain the difference between authorized,issued,and outstanding shares.

Correct Answer
verified
Authorized stock is the total number of ...
View Answer

The correct order from the smallest number of shares to the largest number of shares is:

Correct Answer
verified
B

The par value of common stock represents:

Correct Answer
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The disadvantages of the corporate form of business include:

Correct Answer
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B

Retained earnings represent the earnings retained in the corporation - earnings not paid out as dividends to stockholders.

Correct Answer
verified

Treasury stock is the repurchase of a company's own issued stock.

Correct Answer
verified

The Common Stock account on a company's balance sheet is measured as:

Correct Answer
verified

Which of the following is not a potential feature of preferred stock?

Correct Answer
verified

A stock split has no effect on the total of any account in stockholders' equity.

Correct Answer
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True

Assets plus liabilities equal stockholders' equity.

Correct Answer
verified

Exam 10: Stockholders Equity

If a company has expenses that are more than revenues,the net loss decreases retained earnings.

Correct AnswerverifiedShow Answer

Common stock is listed before preferred stock in the balance sheet.

Correct AnswerverifiedShow Answer

Authorized stock is the number of shares that have been sold to investors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Authorized common stock refers to the total number of shares:

Correct AnswerverifiedShow Answer

Return on equity is calculated as:

Correct AnswerverifiedShow Answer

Environmental Designs issues 10,000 shares of its $1 par value common stock at $25 per share.(1)Record the issuance of the stock.(2)Record the issuance of the stock assuming it is no-par value stock.

Correct AnswerverifiedShow Answer

The stockholders' equity section in the balance sheet shows:

Correct AnswerverifiedShow Answer

Treasury stock is a contra-equity account since treasury stock increases total stockholders' equity.

Correct AnswerverifiedShow Answer

Earnings per share (EPS)

Correct AnswerverifiedShow Answer

Explain the difference between authorized,issued,and outstanding shares.

Correct AnswerverifiedAuthorized stock is the total number of ...View AnswerShow Answer

The correct order from the smallest number of shares to the largest number of shares is:

Correct AnswerverifiedB

The par value of common stock represents:

Correct AnswerverifiedShow Answer

The disadvantages of the corporate form of business include:

Correct AnswerverifiedB

Retained earnings represent the earnings retained in the corporation - earnings not paid out as dividends to stockholders.

Correct AnswerverifiedShow Answer

Treasury stock is the repurchase of a company's own issued stock.

Correct AnswerverifiedShow Answer

The Common Stock account on a company's balance sheet is measured as:

Correct AnswerverifiedShow Answer

Which of the following is not a potential feature of preferred stock?

Correct AnswerverifiedShow Answer

A stock split has no effect on the total of any account in stockholders' equity.

Correct AnswerverifiedTrue

Assets plus liabilities equal stockholders' equity.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Authorized stock is the total number of ...
View Answer

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B

Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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Correct Answer
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True

Correct Answer
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