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 * Multiple Choice Quiz **

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 * 1 ||
 * **1 ** ||  ||||  National Corp. has 100,000 shares authorized, 70,000 shares issued and 5,000 shares of treasury stock. How many shares does National Corp. have outstanding? ||
 * ||  || **A)** || 5,000 ||
 * ||  || **B)** || 65,000 ||
 * ||  || **C)** || 75,000 ||
 * ||  || **D)** || 95,000 ||
 * 2 ||
 * **2 ** ||  ||||  Moore, Inc. sold 50,000 shares of its $1 par value stock for $150,000. As a result: ||
 * ||  || **A)** || Its assets increase by $50,000. ||
 * ||  || **B)** || Its stockholders' equity increases by $50,000. ||
 * ||  || **C)** || Its assets increase by $150,000. ||
 * ||  || **D)** || Its stockholders' equity increases by $100,000. ||
 * 3 ||
 * **3 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> Several years ago, Doran Corp. issued 100,000 of its $1 par value stock for a total of $800,000. This is the only time that it has sold stock. This year it purchased 1,000 shares of its own stock for $10 a share. As a result of acquiring treasury stock: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Its stockholders' equity decreases by $10,000. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">it will recognize a loss of $2,000. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Its common stock account decreases by $10,000. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Its retained earnings decrease by $10,000. ||
 * 4 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">4 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> The following information is available from the accounting records of the First Corporation:
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Its common stock account decreases by $10,000. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Its retained earnings decrease by $10,000. ||
 * 4 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">4 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> The following information is available from the accounting records of the First Corporation:
 * 4 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">4 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> The following information is available from the accounting records of the First Corporation:

<span style="font-family: Verdana,sans-serif; font-size: 9pt;"> What is the amount of stockholders' equity for First Corporation? ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$350,000 ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$430,000 ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$500,000 ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$520,000 ||
 * 5 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">5 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> In 2x15, Eagle Corp. issued 50,000 shares of its $2 par value stock for a total of $300,000. This is the only time that it has sold stock. In 2xx3, it purchased 1,000 of its own shares for $10 a share. In 2x11, Eagle resold the treasury stock for $12,000. As a result of reselling its treasury stock, it will report: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$ - 0 - gain. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$2,000 gain. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$10,000 gain. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$12,000 gain. ||
 * 6 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">6 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> The Wadsworth Corp. has common stock with a par value of $5. During the current year, it paid dividends of $10,000. It sold at $20 per share an additional 1,000 shares of stock that had not been previously issued. In addition, it had net income of $50,000 for the year. What is the amount of change to its stockholders' equity for the year? ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$70,000 ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$45,000 ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$55,000 ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">$60,000 ||
 * 7 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">7 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> Walter Co. declared a dividend. On the payment date of the dividend, its: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Assets are decreased and stockholders' equity is decreased. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Assets are decreased and liabilities are decreased. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Assets are decreased and stockholders' equity is increased. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Liabilities are decreased and common stock is decreased. ||
 * 8 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">8 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> The two fundamental requirements for payment of a cash dividend are sufficient: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Net income and cash. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Cash and common stock. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Cash and retained earnings. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Net income and retained earnings. ||
 * 9 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">9 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> On January 17 of this year, the Alpha Co. issued a 50% stock dividend. As a result of this dividend its: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Assets and stockholders' equity remain the same. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Liabilities are increased and stockholders' equity is decreased. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Assets and liabilities are decreased. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Liabilities are decreased and stockholders' equity is increased. ||
 * 10 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">10 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> King Corp. has one million shares outstanding with a par value of $5. On August 24 of this year, it issued a 10% stock dividend when its stock price was $25. As a result of this stock dividend, retained earnings is: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Increased by $500,000. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Increased by $2,500,000. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Decreased by $500,000. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Decreased by $2,500,000. ||
 * 11 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">11 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> Madewell Corp. has 100,000 shares outstanding with a par value of $1. On March 3, it declared a 100% stock dividend, when its stock price was $15. As a result of this stock dividend, retained earnings is: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Decreased by $1,500,000. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Decreased by $100,000. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Increased by $1,500,000. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Increased by $100,000. ||
 * 12 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">12 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> When a company has a stock split: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">The number of shares outstanding increases and total stockholders equity increases. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Retained earnings decreases and the number of shares outstanding increases. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">The number of shares outstanding increases and total stockholders' equity remains the same. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Retained earnings decreases and total stockholders' equity remains the same. ||
 * 13 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">13 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> Which of the following is not a difference between common stock and preferred stock? ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock generally does not grant voting rights ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock is less risky ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock is not included in stockholders' equity ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock typically has a fixed dividend rate ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Increased by $1,500,000. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Increased by $100,000. ||
 * 12 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">12 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> When a company has a stock split: ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">The number of shares outstanding increases and total stockholders equity increases. ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Retained earnings decreases and the number of shares outstanding increases. ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">The number of shares outstanding increases and total stockholders' equity remains the same. ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Retained earnings decreases and total stockholders' equity remains the same. ||
 * 13 ||
 * **<span style="color: #ffffff; font-family: Verdana,sans-serif; font-size: 10.5pt;">13 ** ||  |||| <span style="font-family: Verdana,sans-serif; font-size: 9pt;"> Which of the following is not a difference between common stock and preferred stock? ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock generally does not grant voting rights ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock is less risky ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock is not included in stockholders' equity ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock typically has a fixed dividend rate ||
 * ||  || **A)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock generally does not grant voting rights ||
 * ||  || **B)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock is less risky ||
 * ||  || **C)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock is not included in stockholders' equity ||
 * ||  || **D)** || <span style="font-family: Verdana,sans-serif; font-size: 9pt;">Preferred stock typically has a fixed dividend rate ||