Chapter 15 Pre-Lecture Questions
T/F A corporation must be incorporated in each state in which it does business.
False
T/F Costs of issuing stock such as underwriting costs, accounting and legal fees, and printing costs should be recorded as a deferred charge and charged to expense over a period not greater than 25 years
False
T/F Cash dividends are not declared or paid on treasury stock
True
T/F If a company only has common stock outstanding, book value per share is computed as total stockholders' equity (net assets) divided by the number of common stock shares outstanding
True
T/F Many corporations restrict retained earnings or dividends without any formal journal entries
True
T/F The declaration of a property dividend will likely generate a gain or loss on the income statement
True
T/F Under IFRS, it is common to report "revaluation surplus" related to increases or decreased in items such as property, plant and equipment; mineral resources; and intangible assets
True
Total stockholders' equity represents > only the amount of earnings that have been retained in the business > a claim against a portion of the total assets of an enterprise > a claim to specific assets contributed by the owners > the maximum amount that can be borrowed by the enterprise
a claim against a portion of the total assets of an enterprise
Common stock dividends distributable is reported on the balance sheet as: > a current liability > an addition to common stock > an addition to additional paid-in capital > a reduction of total stockholders' equity
an addition to common stock
Which of the following is true regarding treasury stock transactions by a corporation? > may decrease but not increase retained earnings > may decrease but not increase net income > may increase but not decrease retained earnings > may increase net income if the cost method is used
may decrease but not increase retained earnings
All of the following decrease Retained Earnings, except: > cash dividends > stock splits > property dividends > stock dividends
stock splits
All of the following are features of preferred stock except: > voting rights > callable at the corporation's option > convertible into common stock > preference as to dividends
voting rights