Accounting for Decision Making Test 3

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

decrease the market value of the stock

The primary reason for a stock split is to:

cumulative

The right to dividends in arrears before the current-year dividend is distributed

a credit to APIC - common stock of $5,000

A new company issues 2,000 shares of $5 par common stock in exchange for the services of a lawyer during its first month of business. The lawyer's normal fee is $15,000 for similar work. Which of the following would be recorded if the stock is not currently trading?

convertible

Allows preferred stock to be exchanged for common stock

participating

Allows preferred stockholders to share on a percentage basis in the distribution of an abnormally large dividend

redeemable

Allows stockholders to sell stock back to the company

callable

Allows the firm to eliminate a class of stock by paying the stockholders a specified amount

future/present value of $1

Amount accumulated at a future/present time that is from a single payment or investment

future/present value of an annuity

Amount accumulated in the future/ at a present time equal to a series of payments that are invested and accrue interest

income taxes payable

An example of a current liability that must be accrued is:

maximum number of shares that can be issued

Authorized stock represents the:

retained earnings: increase; common stock: decrease

Basic Solution Company reported net earnings of $60,000, declared and paid cash dividends on its common stock in the amount of $40,000 during the year, and sold 3,000 shares of $2 par value common stock for $15 per share during the year. What effects would these transactions have on the stockholders' equity accounts?

a loss contingency that should be disclosed in the notes of Boston's financial statements

Boston Trombley Company is a defendant in a lawsuit alleging damages of $3 billion. The litigation is anticipated to continue for several years, but no reasonable estimate can be made at this time regarding ultimate financial responsibility. This situation is an example of:

date of record

Dividends are assigned to certain stockholders (no JE)

net assets, less the redemption value of the preferred stock, must be divided by the number of common stock outstanding

If a company has both common and preferred shares outstanding and wishes to calculate book value per share, it must:

no. the interest rate is actually higher than 8%

If your bank gives you a $2,000 loan at 8% per year, but deducts the interest in advance, is 8% the "real" rate of interest you will pay?

accruals

Include any amount that has been incurred but has not yet been paid

common stock: $500; preferred stock: $1,600

Montana City Company began business on January 1, 2016. The corporate charter authorized issuance of 500 shares of $1 par value common stock and 400 shares of $4 par value preferred stock. What is the maximum amount that can be reported on the balance sheet for Common Stock and Preferred Stock, respectively, if all of the stock is issued?

outstanding shares

Number of shares issued less the number of shares held as treasury stock

contributed capital

One of the two sections of stockholders' equity that accounts for common stock and preferred stock

decrease cash dividend payable and increase cash

Port, Inc. paid a cash dividend on January 2 that had been declared prior to the end of the fiscal year. The entry to pay the dividend will:

common stock

Stock that carries voting rights and the right to elect the corporation's officers and establish its bylaws and governing rules

preferred stock

Stock that is flexible and tailored to a company's needs; also gets preference in dividends

based on the excess of total assets over total liabilities over outstanding shares

The book value per share for a corporation is:

authorized shares

The maximum number of shares a corporation may issue as indicated in the corporate charter

issued shares

The number of shares sold or distributed to the stockholders

in the stockholders' equity section of the balance sheet

Venture Enterprises accountant determined the following: common stock, $0.01 par value $50,000 Where would this item be reported on the financial statements?

as a percentage of the stock's par value or the per share amount

What are the two ways a dividend rate may be stated?

the cash available and the retained earnings balance

What is considered when a company decides to declare a cash dividend on common stock?

a contra liability

What is the correct classification of the account: Discount on Notes Payable?

the cost of treasury stock decreases stockholders' equity

When a company purchases treasury stock, what happens?

date of declaratoin

When cash dividends are declared

payment date

When cash dividends are paid

sale of preferred stock

Which of the following is reported as a financing activity?

a decrease in a current liability from the beginning to the end of the year is accompanied by a decrease of cash

Which of the following is true regarding the inclusion of liabilities on the statement of cash flows?

as a result of the stock dividend, retained earnings is reduced by the par value of the stock issued

Which of the following statements with regard to large stock dividends is true?

an arbitrary amount that exists to fulfill legal requirements

With regard to a corporation's stock, par value is:


संबंधित स्टडी सेट्स

Management info systems Chapter 9 study guide

View Set

Addiction: Ch 1 Drug Use and Abuse

View Set

Scientific Method (Grade 7 Science)

View Set

Chapter 11: South Asia and Southeast Asia

View Set

HTW Chapter 17 Smartbook Questions

View Set