BA 2001 Spring 2012 Quiz # 9 Chapter 9 DUE April 19th PLEASE WRITE YOUR ANSWERS ON THE ANSWER SHEET

T AND HAND IN THAT PAGE ONLY. YOU MAY KEEP THE QUIZ QUESTIONS TO CHECK YOUR ANSWERS AND AS A STUDY AID.
1. Which of the following statements is FALSE? a. Double taxation means that corporate earnings are taxed at the corporate level and a second time when distributed to the shareholders as dividends. b. Managements goal is to maximize the firms value for the stockholders. c. Preferred stock appears on the balance sheet of every corporation that sells stock to the public. d. A corporation has owners who have limited liability. 2. Paid-in capital is the amount of stockholders equity that the: a. corporation has earned through profitable operations. b. stockholders have contributed to the corporation, less the preferred stock. c. stockholders have contributed to the corporation, less the amount of stockholders equity that the corporation has given back to the stockholders. d. stockholders have contributed to the corporation. 3. Preferred stockholders: a. receive dividends before common shareholders. b. receive assets upon liquidation before common shareholders. c. have basic stockholders rights unless a right is specifically denied. d. have all of the above. 4. The entry to record common stock issued at its par value for cash includes a: a. debit to the Common Stock account. b. debit to Retained Earnings. c. credit to the Common Stock account. d. credit to Retained Earnings. 5. When 100 shares of $10 par value Common Stock are issued at $53 per share, Paid-in Capital in Excess of Par valueCommon will: a. increase $1,000. b. increase $4,300. c. increase $5,300. d. not change. 6. Which of the following statements is FALSE? a. Assets other than cash should be recorded at their current fair market value when received from the issuance of stock. b. Companies that have no-par, no-stated-value stock have no additional paid-in capital account. c. The accounting for preferred stock is the same as the accounting for common stock. d. When one stockholder sells his shares of stock to another stockholder, the corporations equity will increase. 7. Treasury stock has a: a. debit balance, the same as other equity accounts. b. debit balance, the opposite of other equity accounts. c. credit balance, the same as other equity accounts. d. credit balance, the opposite of other equity accounts.

8. If 3,000 shares of $5 par common stock are purchased as treasury stock for $16, the total stockholders equity: a. decreases by $48,000. b. decreases by $1,500. c. is the same as before the purchase of the treasury stock. d. increases by $46,500. 9. Gertrudis Corporation has $10 par value Common Stock with 1,000,000 shares authorized, and a value of $7,000,000 before purchasing 3,000 shares of common stock. The resulting number of common shares issued and outstanding is: a. 750,000 shares issued and 697,000 shares outstanding. b. 700,000 shares issued and 697,000 shares outstanding. c. 750,000 shares issued and 747,000 shares outstanding. d. 700,000 shares issued and 747,000 shares outstanding. 10.A dividend becomes a legal liability of the corporation on the: a. declaration date. b. distribution date. c. payment date. d. record date. 11.The payment of a cash dividend previously recorded: a. increases liabilities and increases assets. b. increases stockholders' equity and reduces liabilities. c. reduces liabilities and reduces assets. d. reduces stockholders' equity and reduces assets. 12.The Floristan Company has 50,000 shares of noncumulative preferred stock outstanding, with annual dividends paid at the rate of $2 per share. Floristan also has 100,000 shares of common stock outstanding. If the Floristan Company declares a $150,000 dividend, each outstanding share of common stock would receive: a. $1.50. b. $1.00. c. $0.50. d. $2.00. 13.The entry to record the declaration and distribution of a stock dividend includes a: a. credit to Common Stock and a debit to Retained Earnings. b. debit to Stock Dividends Payable and a credit to Stock Dividends. c. debit to Stock Dividends Payable and a credit to Retained Earnings. d. no entry is made for stock dividends. 14.Hillerbert Company declared a 2-for-1 stock split on its 200,000 shares of $10 par value common stock. As a result of this transaction: a. Paid-in Capital increases by $2,000. b. Common Stock increases to $4,000,000. c. both A and B are correct. d. none of these answers is correct.

BA 2001 Spring 2012 Quiz # 9 Chapter 9 DUE April 19th

PLEASE WRITE YOUR NAME AND ANSWERS ON THE ANSWER SHEET. HAND IN THAT PAGE ONLY. YOU MAY KEEP THE QUIZ QUESTIONS TO CHECK YOUR ANSWERS AND TO USE AS A STUDY AID. Name: _______________________________________

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