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