Chapter 9: T/F

If stockholders own noncumulative preferred stock, any passed dividend must be paid in the following year.

False

Organization costs are current assets that are written off as expenses over a period of time.

False

When stock is sold, the capital stock account is credited for the total amount of cash received.

False

A corporation has a legal right to own property and enter into contracts

True

A corporation is a separate legal entity apart from its owners.

True

Common stockholders usually have voting privileges.

True

Corporations are more closely regulated than sole proprietorships and partnerships.

True

Corporations generate more business activity than sole proprietorships and partnerships combined.

True

Cumulative preferred stockholders must be paid their dividends before common stockholders.

True

The Common Stock Subscribed account is a temporary stockholders' equity account that is used when stock is sold on the installment plan.

True

The Paid-in Capital in Excess of Par account is used to record the difference between the total amount received from stockholders and the par value of the stock issued.

True

The directors of a corporation are elected by its stockholders.

True

The stockholders' equity of a corporation consists of capital stock and retained earnings.

True