Ch. 10 Quiz Acct 2300

A company declares a 5% stock dividend. The debit to Retained Earnings is an amount equal to

the market value of the shares to be issued

Treasury stock

A corporation's own stock that has been reacquired by the corporation and is being held for future use

Which of the following classifications represents the most shares of common stock?

authorized shares

Stockholders of a corporation directly elect the

board of directors

Sandwall Corporation purchased 3,600 shares of its own $1.50 par value common stock for $125,000. As a result of this transaction, the company's stockholders' equity

decreased by $125,00

A stock split

has no effect on total stockholders' equity

The par value of a share of common stock

is stated in the charter

How does the declaration of a cash dividend affect a company's assets, liabilities, and equity?

it results in an increase to liabilities and a decrease to stockholders' equity, while assets remain the same

Which of the following is a characteristic of a corporation?

limited liability of stockholders

A company might purchase treasury stock for all of the following reasons except

management wants to decrease the earrings per share of common stock

For cash dividends, the journal entry on the date of record is

no journal entry is required on the date of record

Preferred stock is least likely to have which of the following characteristics?

preference as to voting

Stockholders are eligible for a dividend if they own the stock on the date of

record

When treasury stock is sold for less than its cost, the entry should include a debit to

retained earnings

The two main categories of stockholders' equity are

retained earnings and paid-in capital

Which of the following statements is not true about a 3-for-1 stock split?

total stockholders' equity increases