Bus 201 Quiz 10

The declaration and issuance of a stock dividend:

Does not change total assets, liabilities, or total stockholders' equity.

Advantages of the corporate form of business include which of the following? I. Double taxation II. Ability to raise capital III. Ability to transfer ownership IV. More paperwork V. Limited liability

II., III., V.

The par value of shares issued is normally recorded in the:

Common Stock account.

A company acquires 1,000 shares of its own $1 par common stock for $15 per share. This purchase would be recorded with a:

Debit to Treasury Stock for $15,000

When treasury stock is acquired, what is the effect on total stockholders' equity?

Decrease

Preferred stock is called preferred because it usually has two preferences over common stock. These preferences relate to:

Distribution of assets if the corporation is dissolved and payment of dividends.

A company currently has 200,000 shares issued and 190,000 shares outstanding. If the company purchases 20,000 shares of treasury stock, what amount of shares will be outstanding?

170,000

South Beach Apparel issued 10,000 shares of $1 par value stock for $5 per share. What is true about the journal entry to record the issuance?

Credit Additional Paid-In Capital $40,000.

On June 1, the board of directors declares a cash dividend to be paid on June 30 to stockholders of record on June 15. On which date would the company record a credit to the Dividends Payable account?

June 1

Issued stock refers to the number of shares:

Outstanding plus treasury shares.