Accounting ch 13-15
Retained earnings are a part of stockholders equity
TRUE
Which one of the following would not be considered an advantage of the corporate form of organization?
GOVERNMENT REGULATION
Secured bonds are bonds that
HAVE SPECIFIC ASSETS OF THE ISSUER PLEDGED AS COLLATERAL
The chief accounting officer in a company is known as the
CONTROLLER
Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called
CALLABLE BONDS
Bonds that may be exchanged for common stock at the option of the bondholders are called
CONVERTIBLE BONDS
A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a
CORPORATION IS SUBJECT TO MORE FEDERAL AND STATE GOVERNMENT REGULATIONS
The date on which a cash dividend becomes a binding legal obligation is on the
DECLARATION DATE
The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to
DECREASE TOTAL ASSETS AND STOCKHOLDERS EQUITY
A Board of Directors does not generally
EXECUTE POLICY
A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares.
FALSE
A corporation must be incorporated in each state in which it does business
FALSE
A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends on the date of record.
FALSE
Callable bonds are bonds that can be converted into common stock at the bondholder's option.
FALSE
Dividends in arrears on cumulative preferred stock are considered a liability
FALSE
The amount of a cash dividend liability is recorded on the date of record because it is on that date that the persons or entities who will receive the dividend are identified.
FALSE
The par value of common stock must always be equal to its market value on the date the stock is issued
FALSE
Treasury stock purchased for $35 per share that is reissued at $31 per share results in a Loss on Sale of Treasury Stock being recognized on the income statement
FALSE
When a corporation has only one class of capital stock, it is identified as preferred stock
FALSE
A small stock dividend is defined as
LESS THAN 20-25% OF THE CORPORATION ISSUED STOCK
Which of the following statements is not considered a disadvantage of the corporate form of organization?
LIMITED LIABILITY OF STOCKHOLDERS
On the dividend record date,
NO ENTRY IS REQUIRED
A corporation recognizes a gain or loss
ONLY WHEN BONDS ARE REDEEMED BEFORE MATURITY
The two ways that a corporation can be classified by purpose are
PROFIT AND NON-PROFIT
The term residual claim refers to stockholders' right to
SHARE IN ASSETS UPON LIQUIDATION
Each of the following is correct regarding bonds except they are
SOLD IN LARGE DENOMINATIONS
Which of the following is not true of a corporation?
THE ACTS OF ITS OWNERS BIND THE CORPORATION
Stockholders of a corporation directly elect
THE BOARD OF DIRECTORS
Which of the following statements about dividends is not accurate?
THE BOARD OF DIRECTORS IS OBLIGATED TO DECLARE DIVIDENDS
The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is THE
THE CORPORATION
A debenture bond is an unsecured bond which is issued against the general credit of the borrower.
TRUE
A long-term note that pledges title to specific property as security for a loan is known as a mortgage payable.
TRUE
A stockholder has the right to vote in the election of the board of directors.
TRUE
A successful corporation can have a continuous and perpetual life.
TRUE
Bonds are a form of interest-bearing notes payable.
TRUE
Cash dividends are not a liability of the corporation until they are declared by the board of directors.
TRUE
Dividends may be declared and paid in cash or stock
TRUE
Earnings per share indicates the net income earned by each share of outstanding common stock.
TRUE
If bonds are issued at a premium, the carrying value of the bonds will be greater than the face value of the bonds for all periods prior to the bond maturity date.
TRUE
The number of common shares outstanding can never be greater than the number of shares issued.
TRUE
Under the cost method, Treasury Stock is debited at the price paid to reacquire the shares, and the same amount is credited to Treasury Stock when the shares are sold
TRUE