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    1 1 Document Transcript

    • 0% (0 out of 15 correct)<br />1.Which one of the following is not a right of stockholders?A. To share proportionately in profits and losses.B. To share proportionately in all management decisions.C. To share proportionately in corporate assets upon liquidation.D. To share proportionately in any new issues of stock of the same class.<br />2.Characteristics of the corporate form of organization include all of the following exceptA. capital stock or share system.B. formality of profit distribution.C. variety of ownership interests.D. unlimited liability of stockholders.<br />3.Categories of stockholders' equity include all of the following exceptA. additional paid-in capital.B. capital stock.C. earned capital stock.D. retained earnings.<br />4.Additional paid-in capital is not affected by the issuance ofA. stated value stock.B. par value stock.C. no-par stock.D. preferred stock.<br />5.All of the following are reasons for purchasing treasury stock except toA. make a market for the stock.B. increase the number of shareholders.C. increase the earnings per share and return on equity.D. provide tax efficient distributions to shareholders.<br />6.The entry to record the retirement of treasury stock would include a debit toA. Common Stock for the cost of the treasury shares.B. Treasury stock for the cost of the treasury shares.C. Common Stock for the par value of the treasury shares.D. Treasury Stock for the par value of the shares.<br />7.All of the following are features of preferred stock exceptA. callable at the corporation's option.B. convertible into common stock.C. preference as to dividends.D. voting.<br />8.The most common type of preferred stock isA. callable preferred stock.B. convertible preferred stock.C. cumulative preferred stock.D. participating preferred stock.<br />9.Which of the following dividends do not reduce total stockholders' equity?A. Liquidating dividends.B. Cash dividends.C. Stock dividends.D. All of the options reduce total stockholders' equity.<br />10.When a property dividend is declared, retained earnings is reduced by theA. book value of the property.B. cost of the property.C. fair value of the property.D. carrying value of the property.<br />11.In a small stock dividend the amount transferred from retained earnings is based on theA. stated value of the stock.B. par value of the stock.C. fair value of the stock.D. book value of the stock.<br />12.Preferred stockholders generally receive the largest amount of cash dividends if the preferred stock isA. noncumulative and nonparticipating.B. noncumulative and fully participating.C. cumulative and nonparticipating.D. cumulative and fully participating.<br />13.Preferred stockholders receive more than the specified dividend rate when the stock isA. cumulative.B. convertible.C. participating.D. cumulative or participating.<br />14.Common stock dividends distributable are reported on the balance sheet asA. an addition to additional paid-in capital.B. an addition to common stock.C. a current liability.D. a reduction of total stockholders' equity.<br />15.The rate of return on common stock equity is computed by dividingA. net income by average common stockholders' equity.B. net income by ending common stockholders' equity.C. net income less preferred dividends by average common stockholders' equity.D. net income less preferred dividends by ending common stockholders' equity.<br />Retake Test<br />