Accounting Chapter 10

Double taxation means that​ the:

corporation pays taxes on its earnings and the shareholders pay taxes on the dividends received from the corporation.

Which one of the following is NOT a​ stockholder's right of ownership in a​ corporation?

the right to decide if a dividend should be distributed

Stockholders of a corporation directly elect​ the:

Board of directors.

The chairperson of the board of directors often has the title​ of:

Chief Executive Officer​ (CEO).

A company buys treasury stock for​ $10 per share. The company later sells the treasury stock for​ $11 per share. What is the difference between the resale price and the cost of the treasury stock​ called?

Gain on Sale of Treasury Stock // Paidminus−in Capital in Excess of Par // Paidminus−in Capital from Treasury Stock Transactions

When a company issues common stock at a price per share greater than its par value per​ share, the excess should be credited​ to:

Paid−in Capital in Excess of Par—Common.

Regarding the retained earnings​ account, which of the following statements is​ INCORRECT?

Stock dividends decrease retained earnings. // Net income is the only item that increases retained earnings. // Other adjustments to retained earnings are usually relatively minor and relatively rare.

The basic form of capital stock​ is:

a share of common stock.

The issuance of common stock in exchange for cash will be reported​ in:

the financing activities section of the statement of cash flows.

The purchase of treasury stock returns​ ________ to the stockholders but also​ ________.

cash; decreases their ownership of the company.

Treasury stock has​ a:

debit​ balance, the opposite of other​ stockholders' equity accounts.

The date on which a cash dividend becomes a legal obligation is​ the:

declaration date.

Which of the following is NOT considered to be an advantage of forming a​ corporation?

government regulation

A stock​ split

has no effect on total​ stockholders' equity.

When 100 shares of​ $1 par value Common Stock are issued at $30 per​ share, Paid−in Capital in Excess of Par—Common ​will:

increase $2900

How does the declaration of a cash dividend affect the accounting​ equation?

increase to liabilities and a decrease to​ stockholders' equity

Reasons that a company would purchase treasury stock include all of the following​ EXCEPT:

management wants to decrease earnings per share of common stock.

The purchase of treasury stock is reported on the statement of cash flows as​ a:

negative amount in the financing activities section.

Treasury stock accounts for the difference between the number​ of:

outstanding shares and issued shares.

Corporations may choose to distribute stock dividends in order​ to:

reduce the per−share market price of its stock and continue dividends but conserve cash

​Stockholders' equity is divided​ into

retained earnings and paid−in capital.

The arbitrary amount assigned by a company to a share of its stock is​ the:

stated value per share and par value per share

An increase in the number of issued and outstanding shares of stock along with a proportional reduction in the​ stock's par value per share is​ a:

stock split

Mr.​ Jorgensen, a shareholder in the Best​ Corporation, owns 9,000 shares of its common stock. Mr. Jorgensen receives a 6​% stock dividend. After the stock​ dividend, Mr. Jorgensen will have a:

total of 9,540 shares of Best​ Corporation's common stock.

Previously issued stock that a corporation purchases from shareholders is​ called:

treasury stock.