Stockholders Equity
Which of the following statements is true of the date of record?
No journal entry is made on the date of record.
Which of the following is true of preferred stock?
Preferred stockholders generally receive a fixed amount of dividends before common stockholders receive a dividend.
A corporation originally issued $5 par value common stock for $6 per share. Which of the following would be included in the entry to record the purchase of 300 shares of treasury stock for $10 per share?
Treasury Stock would be debited for $3,000.
Paid-in capital consists of ________.
amounts received from stockholders in exchange for stock
Which of the following number is the largest?
authorized shares
Which of the following occurs when a stockholder invests cash in a corporation in exchange for stock?
both assets and stockholders' equity are increased
Treasury stock is a ________.
contra equity account
Bradley Corporation issued 10,000 shares of common stock. The stock has a par value of $10 per share and was sold for cash at $12 per share. The adjusting entry would include the following:
credit to Additional Paid in Capital for $20,000
Bradley Corporation issued 1,000 shares of preferred stock. The stock has a par value of $100 per share and was sold for cash at $102 per share. The adjusting entry would include the following:
credit to Preferred stock for $100,000
Dividends are declared on November 1.The date of record is November 15.The payment date is November 30.Which of the following is the journal entry needed on November 30?
debit Dividends Payable and credit Cash
On the ________, cash dividends become a liability of a corporation.
declaration date
The effect on the accounting equation of paying a previously declared dividend is
decrease assets and liabilities
The purchase of treasury stock ________.
decreases both assets and stockholders' equity
On the date of record of dividends, the company ________.
determines who owns the shares of stock on that date
The effect on the accounting equation of issuing stock at higher than its par value is
increase assets and equity
The effect on the accounting equation of declaring a dividend is
increase liabilities, decrease equity
Which of the following is a true about the effect of the recording of a stock split?
it will have no effect on total equity
Which of the following occurs when a previously declared dividend is paid?
liabilities decrease
The number of shares of issued stock equals
outstanding shares plus treasury shares
Treasury stock causes the number of ________.
outstanding shares to go down
Dividends in arrears are ________.
passed dividends on cumulative preferred stock
Outstanding stock refers to the ________.
shares of stock that are held by the stockholders
Which of the following occurs when a cash dividend is declared?
stockholders' equity decreases
Preferred stock is a stock ________.
that gives its owners certain benefits over common stock
The par value of stock is ________.
the amount assigned by a company to a share of its stock
Which of the following would be included in the entry to record the payment of a previously declared dividend of $0.25 per share on 12,500 shares of common stock?
Dividends Payable would be debited for $3,125.
Assume the following information for Petra Sales Inc.: Common stock, 200,000 issued, 180,000 outstanding Treasury stock: 20,000 shares purchased at $12 per share If Petra Sales purchases an additional 5,000 shares of treasury stock, what number of shares will be shown as issued and outstanding?
200,000 issued; 175,000 outstanding
Which of the following is true of dividends?
Dividends are a distribution of cash, stock, or other assets to the stockholders.
A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock. Which of the following would be included in the entry to record the declaration?
Dividends would be debited for $5,000