Chapter 11

If a company issues par-value ordinary shares, the balance in Share Capital - Ordinary will be the a. market value of all shares issued. b. par value of all shares issued. c. market value of all shares authorized. d. par value of all shares outstanding.

b. par value of all shares issued.

Dividends are predominantly paid in a. earnings. b. property. c. cash. d. shares.

c. cash.

When shares are issued for legal services, the transaction is recorded by debiting Organization Expense for the a. stated value of the shares. b. par value of the shares. c. market value of the shares. d. book value of the shares.

c. market value of the shares

Regular dividends are declared out of a. Share Premium-Ordinary. b. Treasury Shares. c. Share Capital-Ordinary. d. Retained Earnings.

d. Retained Earnings.

Treasury Shares are a(n) a. contra asset account. b. retained earnings account. c. asset account. d. contra equity account.

d. contra equity account.

Treasury shares should be reported in the equity section immediately after a. share capital-ordinary. b. share capital-preference. c. share premium-ordinary. d. retained earnings.

d. retained earnings.

If shares are issued for a non-cash asset, the asset should be recorded on the books of the corporation at a. fair value. b. cost. c. zero. d. a nominal amount.

A. Fair value.

Ephram Company has 4,000 shares of 6%, $100 par non-cumulative preference shares outstanding at December 31, 2017. No dividends have been paid on these shares for 2016 or 2017. Dividends in arrears at December 31, 2017 total a. $0. b. $2,400. c. $24,000. d. $48,000.

a. $0.

Which one of the following events would not require a formal journal entry on a corporation's books? a. 2 for 1 share split b. 100% share dividend c. 2% share dividend d. $1 per share cash dividend

a. 2 for 1 share split

If Kiner Company issues 5,400 ordinary shares with a $5 par value for $96,000, the account a. Share Capital-Ordinary will be credited for $27,000. b. Share Premium-Ordinary will be credited for $27,000. c. Share Premium-Ordinary will be credited for $96,000. d. Cash will be debited for $69,000.

a. Share Capital-Ordinary will be credited for $27,000.

Which of the following statements regarding the date of a cash dividend declaration is not accurate? a. The dividend can be rescinded once it has been declared. b. The corporation is committed to a legal, binding obligation. c. The board of directors formally authorizes the cash dividend. d. A liability account must be increased.

a. The dividend can be rescinded once it has been declared.

Which of the following is not a right or preference associated with preference stock? a. The right to vote b. First claim to dividends c. Preference to corporate assets in case of liquidation d. To receive dividends in arrears before ordinary shareholders receive dividends

a. The right to vote

Ed Tresh has invested $400,000 in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Tresh stand to lose? a. Up to his total investment of $400,000. b. Zero. c. The $400,000 plus any personal assets the creditors demand. d. $200,000.

a. Up to his total investment of $400,000.

The chief accounting officer in a company is known as the a. controller. b. treasurer. c. vice-president. d. president.

a. controller.

Treasury shares are generally accounted for by the a. cost method. b. market value method. c. par value method. d. stated value method.

a. cost method.

Andrews, Inc. paid $60,000 to buy back 12,000 shares of its $1 par value ordinary shares. These shares were sold later at a selling price of $7 per share. The entry to record the sale includes a a. credit to Share Premium-Treasury for $24,000. b. credit to Retained Earnings for $24,000. c. debit to Share Premium-Treasury for $60,000. d. debit to Retained Earnings for $60,000.

a. credit to Share Premium-Treasury for $24,000.

The date on which a cash dividend becomes a binding legal obligation is on the a. declaration date. b. date of record. c. payment date. d. last day of the fiscal year-end.

a. declaration date.

The ability of a corporation to obtain capital is a. enhanced because of limited liability and ease of share transferability. b. less than a partnership. c. restricted because of the limited life of the corporation. d. about the same as a partnership.

a. enhanced because of limited liability and ease of share transferability.

The par value of shares a. is legally significant. b. reflects the most recent market price. c. is selected by the IASB. d. is indicative of the worth of the shares.

a. is legally significant.

If preference shares are cumulative, the a. preference dividends not declared in a given year are called dividends in arrears. b. preference shareholders and the ordinary shareholders receive equal dividends. c. preference shareholders and the ordinary shareholders receive the same total dollar amount of dividends. d. ordinary shareholders will share in the preference dividends.

a. preference dividends not declared in a given year are called dividends in arrears.

The two ways that a corporation can be classified by ownership are a. publicly held and privately held. b. share and non-share. c. inside and outside. d. majority and minority.

a. publicly held and privately held.

A typical organization chart showing delegation of authority would show a. shareholders delegating to the board of directors. b. the board of directors delegating to shareholders. c. the chief executive officer delegating to the board of directors. d. the controller delegating to the chief executive officer.

a. shareholders delegating to the board of directors.

Double taxation means that a. the earnings of the corporation are taxed once to the corporation and a second time when distributed to the shareholders. b. corporate profits are taxed by more than one government entity. c. the corporation is taxed as a separate legal entity. d.the corporation's profits are taxed as personal income to the shareholders

a. the earnings of the corporation are taxed once to the corporation and a second time when distributed to the shareholders.

Kendrick Corporation was organized on January 2, 2017. During 2017, Kendrick issued 20,000 shares at $32 per share, purchased 4,000 treasury shares at $26 per share, and had net income of $500,000. What is the total amount of equity at December 31, 2017? a. $740,000 b. $1,036,000 c. $1,044,000 d. $1,060,000

b. $1,036,000

ABC, Inc. has 1,000 shares of 6%, $100 par value, cumulative preference shares and 50,000 ordinary shares with a $1 par value outstanding at December 31, 2017. What is the annual dividend on the preference shares? a. $60 per share b. $6,000 in total c. $600 in total d. $.60 per share

b. $6,000 in total

Which of the following statements reflects the transferability of ownership rights in a corporation? a. If a shareholder decides to transfer ownership, he must transfer all of his shares. b. A shareholder may dispose of part or all of his shares. c. A shareholder must obtain permission from the board of directors before selling shares. d. A shareholder must obtain permission from at least three other shareholders before selling shares.

b. A shareholder may dispose of part or all of his shares.

Which one of the following is not necessary in order for a corporation to pay a cash dividend? a. Adequate cash b. Approval of shareholders c. Declaration of dividends by the board of directors d. Retained earnings

b. Approval of shareholders

A corporation purchases 50,000 shares of its own $10 par ordinary shares for $25 per share, recording it at cost. What will be the effect on total equity? a. Increase by $500,000 b. Decrease by $1,250,000 c. Increase by $1,250,000 d. Decrease by $500,000

b. Decrease by $1,250,000

Elton Manufacturing Corporation purchased 8,000 shares of its own previously issued $10 par ordinary shares for $230,000. As a result of this event, a. Elton's Share Capital-Ordinary account decreased $80,000. b. Elton's total equity decreased $230,000. c. Elton's Share Premium-Ordinary account decreased $150,000. d. All of these answer choices are correct.

b. Elton's total equity decreased $230,000.

Which of the following would not be true of a privately held corporation? a. It is sometimes called a closely held corporation. b. Its shares are regularly traded on a National securities exchange. c. It does not offer its shares for sale to the general public. d. It is usually smaller than a publicly held company.

b. Its shares are regularly traded on a National securities exchange.

Share dividends and share splits have the following effects on retained earnings: Share Splits Share Dividends a. Increase No change b. No change Decrease c. Decrease Decrease d.No changeNo change

b. No change Decrease

Indicate the respective effects of the declaration of a cash dividend on the following statement of financial position sections: Total Assets Total Liabilities Total Equity a. Increase Decrease No change b. No change Increase Decrease c. Decrease Increase Decrease d. Decrease No change Increase

b. No change Increase Decrease

Which of the following is not a right of an ordinary shareholder? a. Right to vote and elect the board of directors. b. Right to receive dividends. c. Pre-emptive right. d. Share in assets at liquidation.

b. Right to receive dividends.

Kerwin Packaging Corporation began business in 2016 by issuing 60,000 ordinary shares with a $5 par for $8 per share and 15,000 preference shares of 6%, $10 par at par. At year end, the common share had a market value of $10. On its December 31, 2017, statement of financial position, Kerwin Packaging would report a. Share Capital-Ordinary of $600,000. b. Share Capital-Ordinary of $300,000. c. Share Capital-Ordinary of $320,000. d. Share Premium-Ordinary of $300,000.

b. Share Capital-Ordinary of $300,000.

Cole Corporation issues 15,000 preference shares with a $50 par value for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $900,000 and a credit or credits to a. Share Capital—Preference for $900,000. b. Share Capital—Preference for $750,000 and Share Premium—Preference for $150,000. c. Share Capital—Preference for $750,000 and Retained Earnings for $150,000. d. Share Premium for $900,000.

b. Share Capital—Preference for $750,000 and Share Premium—Preference for $150,000

Which of the following is not a significant date with respect to dividends? a. The declaration date b. The incorporation date c. The record date d. The payment date

b. The incorporation date

Which of the following factors does not affect the initial market price of shares? a. The company's anticipated future earnings b. The par value of the shares c. The current state of the economy d. The expected dividend rate per share

b. The par value of the shares

Which one of the following is not an ownership right of a shareholder in a corporation? a. To vote in the election of directors b. To declare dividends on the ordinary shares c. To share in assets upon liquidation d. To share in corporate earnings

b. To declare dividends on the ordinary shares

A company would not acquire treasury shares a. in order to reissue shares to officers. b. as an asset investment. c. in order to increase trading of the company's shares. d. to have additional shares available to use in acquisitions of other companies.

b. as an asset investment.

When preference shares are cumulative, preference dividends not declared in a period are a. considered a liability. b. called dividends in arrears. c. distributions of earnings. d. never paid.

b. called dividends in arrears.

The effect of a share dividend is to a. decrease total assets and equity. b. change the composition of equity. c. decrease total assets and total liabilities. d. increase the par value per share.

b. change the composition of equity

A factor which distinguishes the corporate form of organization from a sole proprietorship or partnership is that a a. corporation is organized for the purpose of making a profit. b. corporation is subject to government taxes. c. corporation is an accounting economic entity. d. corporation's temporary accounts are closed at the end of the accounting period.

b. corporation is subject to government taxes.

If an investment banking firm underwrites a share issue, the a. risk of being unable to sell the shares stays with the issuing corporation. b. corporation obtains cash immediately from the investment firm. c. investment firm has guaranteed profits on the sale of the shares. d. issuance of shares is likely to be directly to creditors.

b. corporation obtains cash immediately from the investment firm.

Rancho Corporation sold 500 treasury shares for $40 per share. The cost for the shares was $30. The entry to record the sale will include a a. credit to Gain on Sale of Treasury Shares for $15,000. b. credit to Share Premium-Treasury for $5,000. c. debit to Share Premium-Ordinary for $5,000. d. credit to Treasury Shares for $20,000.

b. credit to Share Premium-Treasury for $5,000.

The acquisition of treasury shares by a corporation a. increases its total assets and total equity. b. decreases its total assets and total equity. c. has no effect on total assets and total equity. d. requires that a gain or loss be recognized on the income statement.

b. decreases its total assets and total equity

Ordinary Share Dividends Distributable is classified as a(n) a. asset account. b. equity account. c. expense account. d. liability account.

b. equity account.

In the financial statements, organization costs appears a. immediately below Retained Earnings in the equity section. b. in the income statement. c. as part of share premium in the equity section. d. as an intangible asset.

b. in the income statement.

The sale of ordinary shares below par a. is a common occurrence in most jurisdictions. b. is not permitted in most jurisdictions. c. is a practice that most shareholders encourage. d. requires that a liability be recorded for the difference between the sales price and the par value of the shares.

b. is not permitted in most jurisdictions.

Share Premium-Ordinary a. is credited when a no-par share does not have a stated value. b. is reported as part of equity on the statement of financial position. c. represents the amount of legal capital. d. normally has a debit balance.

b. is reported as part of equity on the statement of financial position

Each of the following decreases retained earnings except a a. cash dividend. b. liquidating dividend. c. share dividend. d. All of these decrease retained earnings.

b. liquidating dividend.

Dividends in arrears on cumulative preference shares a. are shown in equity in the statement of financial position. b. must be paid before ordinary shareholders can receive a dividend. c. should be recorded as a current liability until they are paid. d. enable the preference shareholders to share equally in corporate earnings with the ordinary shareholders.

b. must be paid before ordinary shareholders can receive a dividend.

On the dividend record date, a. a dividend becomes a current obligation. b. no entry is required. c. an entry may be required if it is a share dividend. d. Dividends Payable is debited.

b. no entry is required.

Agler, Inc. has 10,000 shares of 5%, $100 par value, cumulative preference shares and 100,000 ordinary shares with a $1 par value outstanding at December 31, 2017. If the board of directors declares a $40,000 dividend, the a. preference shareholders will receive 1/10th of what the ordinary shareholders will receive. b. preference shareholders will receive the entire $40,000. c. $50,000 will be held as restricted retained earnings and paid out at some future date. d. preference shareholders will receive $20,000 and the ordinary shareholders will receive $20,000.

b. preference shareholders will receive the entire $40,000.

The two ways that a corporation can be classified by purpose are a. general and limited. b. profit and not-for-profit. c. local and national d. publicly held and privately held.

b. profit and not-for-profit.

The term residual claim refers to a shareholders' right to a. receive dividends. b. share in assets upon liquidation. c. acquire additional shares when offered. d. exercise a proxy vote.

b. share in assets upon liquidation.

Shareholders of a corporation directly elect a. the president of the corporation. b. the board of directors. c. the treasurer of the corporation. d. all of the employees of the corporation.

b. the board of directors.

The officer who is generally responsible for maintaining the cash position of the corporation is the a. controller. b. treasurer. c. cashier. d. internal auditor.

b. treasurer.

Lopez, Inc. has 2,500 shares of 6%, $50 par value, cumulative preference shares and 50,000 ordinary shares with a $1 par value outstanding at December 31, 2016, and December 31, 2017. The board of directors declared and paid a $5,000 dividend in 2016. In 2017, $22,000 of dividends are declared and paid. What are the dividends received by the preference and ordinary shareholders in 2017? Preference Ordinary a. $12,000 $10,000 b. $11,000 $11,000 c. $10,000 $12,000 d. $7,500 $14,500

c. $10,000 $12,000

What is ordinarily the first step in the formation of a corporation in the United States? a. Development of by-laws for the corporation b. Issuance of the corporate charter c. Application for incorporation to the appropriate Secretary of State d. Registration with a government agency

c. Application for incorporation to the appropriate Secretary of State

Dawson Company issued 500 no-par ordinary shares for $7,500. Which of the following journal entries would be made if the shares have a stated value of $2 per share? a. Cash 7,500 Share Capital-Ordinary 7,500 b. Cash 7,500 Share Capital-Ordinary 6,500 Share Premium-Ordinary 1,000 c. Cash 7,500 Share Capital-Ordinary 1,000 Share Premium-Ordinary 5,500 d. Share Capital-Ordinary 7,500 Cash 7,500

c. Cash 7,500 Share Capital-Ordinary 1,000 Share Premium-Ordinary 5,500

The concept of an "artificial being" refers to which form of business organization? a. Partnership b. Sole proprietorship c. Corporation d. Limited partnership

c. Corporation

A corporation purchases 30,000 shares of its own $20 par ordinary shares for $35 per share, recording it at cost. What will be the effect on total equity? a. Increase by $1,050,000 b. Decrease by $600,000 c. Decrease by $1,050,000 d. Increase by $600,000

c. Decrease by $1,050,000

The effect of the declaration of a cash dividend by the board of directors is to Increase Decrease a. Equity Assets b. Assets Liabilities c. Liabilities Equity d. Liabilities Assets

c. Liabilities Equity

Which of the following statements is not considered a disadvantage of the corporate form of organization? a. Additional taxes b. Government regulations c. Limited liability of shareholders d. Separation of ownership and management

c. Limited liability of shareholders

Which of the following rights of an ordinary shareholder is being eliminated by many companies? a. Right to vote and elect the board of directors. b. Right to receive a pro rata share of dividends paid. c. Pre-emptive right. d. Share in assets at liquidation.

c. Pre-emptive right.

New Corp. issues 4,000 ordinary shares with a $10 par value at $16 per share. When the transaction is recorded, credits are made to a. Share Capital-Ordinary $24,000 and Share Premium-Ordinary $40,000. b. Share Capital-Ordinary $64,000. c. Share Capital-Ordinary $40,000 and Share Premium-Ordinary $24,000. d. Share Capital-Ordinary $40,000 and Retained Earnings $24,000.

c. Share Capital-Ordinary $40,000 and Share Premium-Ordinary $24,000

If shares are issued for less than par value, the account a. Share Premium-Ordinary is credited. b. Share Premium-Ordinary is debited if a debit balance exists in the account. c. Share Premium-Ordinary is debited if a credit balance exists in the account. d. Retained Earnings is credited.

c. Share Premium-Ordinary is debited if a credit balance exists in the account

If Vickers Company issues 8,000 ordinary shares with a $5 par value for $250,000, a. Share Capital-Ordinary will be credited for $250,000. b. Share Premium-Ordinary will be credited for $40,000. c. Share Premium-Ordinary will be credited for $210,000. d. Cash will be debited for $210,000.

c. Share Premium-Ordinary will be credited for $210,000.

If ordinary shares are issued for an amount greater than par value, the excess should be credited to a. Cash. b. Retained Earnings. c. Share Premium-Ordinary. d. Legal Capital.

c. Share Premium-Ordinary.

Which of the following is not true of a corporation? a. It may buy, own, and sell property. b. It may sue and be sued. c. The acts of its owners bind the corporation. d. It may enter into binding legal contracts in its own name.

c. The acts of its owners bind the corporation

A corporation is not committed to a legal obligation when it declares a. a cash dividend. b. either a cash dividend or a share dividend. c. a share dividend. d. a distribution date.

c. a share dividend.

Of the various dividends types, the two most common types in practice are a. cash and large share. b. cash and property. c. cash and small share. d. property and small share.

c. cash and small share.

Rebel Inc. issued 7,000 no-par ordinary shares with a stated value of $3 per share. The market price of the shares on the date of issuance was $12 per share. The entry to record this transaction includes a a. debit to Cash for $21,000. b. credit to Share Capital-Ordinary for $84,000. c. credit to Share Capital-Ordinary for $21,000. d. debit to Share Premium-Ordinary for $84,000.

c. credit to Share Capital-Ordinary for $21,000.

Limited liability of shareholders means that a. the corporation is subject to strict government regulations. b. the entity is separate and distinct from its owners. c. creditors have no legal claim to the assets of the owners unless fraud has occurred. d. they are taxed as a separate legal entity.

c. creditors have no legal claim to the assets of the owners unless fraud has occurred.

Dailey Company is a publicly held corporation whose $1 par value ordinary shares are actively traded at $22 per share. The company issued 3,000 shares to acquire land recently advertised at $82,000. When recording this transaction, Dailey Company will a. debit Land for $82,000. b. credit Share Capital-Ordinary for $66,000. c. debit Land for $66,000. d. credit Share Premium-Ordinary for $79,000.

c. debit Land for $66,000.

The authorized shares of a corporation a. only reflects the initial capital needs of the company. b. is indicated in its by-laws. c. is indicated in its charter. d.must be recorded in a formal accounting entry

c. is indicated in its charter.

Each of the following decreases total equity except a a. cash dividend. b. liquidating dividend. c. share dividend. d. All of these decrease total equity.

c. share dividend.

Under the corporate form of business organization a. a shareholder is personally liable for the debts of the corporation. b. shareholders' acts can bind the corporation even though the shareholders have not been appointed as agents of the corporation. c. the corporation's life is stipulated in its charter. d. shareholders wishing to sell their corporation shares must get the approval of other shareholders.

c. the corporation's life is stipulated in its charter.

The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is a. the sole proprietorship. b. the partnership. c. the corporation. d.not known

c. the corporation.

Beckham Company has 2,000 shares of 5%, $100 par cumulative preference shares outstanding at December 31, 2017. No dividends have been paid on these shares for 2016 or 2017. Dividends in arrears at December 31, 2017 total a. $0. b. $1,000. c. $10,000. d. $20,000.

d. $20,000.

King George Company was authorized to issue 100,000 ordinary shares. The company issued 54,000 shares and later purchased 10,000 treasury shares. The number of outstanding ordinary shares is: a. 90,000. b. 46,000. c. 54,000. d. 44,000.

d. 44,000.

Which one of the following is a privately held corporation? a. Intel b. General Electric c. Caterpillar Inc. d. Cargill Inc.

d. Cargill Inc.

Which one of the following would not be considered an advantage of the corporate form of organization? a. Limited liability of owners b. Separate legal existence c. Continuous life d. Government regulations

d. Government regulations

S. Lawyer performed legal services for E. Corp. Due to a cash shortage, an agreement was reached whereby E. Corp. would pay S. Lawyer a legal fee of approximately $20,000 by issuing 5,000 ordinary shares (par $1). The shares trade on a daily basis and the market price of the shares on the day the debt was settled is $3 per share. Given this information, the journal entry for E. Corp. to record this transaction is: a. Legal Expense 15,000 Share Capital-Ordinary 15,000 b. Legal Expense 20,000 Share Capital-Ordinary 20,000 c. Legal Expense 20,000 Share Capital-Ordinary 5,000 Share Premium-Ordinary 15,000 d. Legal Expense 15,000 Share Capital-Ordinary 5,000 Share Premium-Ordinary 10,000

d. Legal Expense 15,000 Share Capital-Ordinary 5,000 Share Premium-Ordinary 10,000

Simon Company issued 3,000 ordinary shares with a $5 par value in payment of its attorney's bill of $60,000. The bill was for services performed in helping the company incorporate. Simon should record this transaction by debiting a. Legal Expense for $15,000. b. Legal Expense for $60,000. c. Organization Expense for $15,000. d. Organization Expense for $60,000.

d. Organization Expense for $60,000.

If a corporation declares a 10% ordinary share dividend, the account to be debited on the date of declaration is a. Ordinary Share Dividends Distributable. b. Share Capital-Ordinary. c. Share Premium-Ordinary. d. Retained Earnings.

d. Retained Earnings.

The Nice Corporation issues 20,000 preference shares with a $100 par value for cash at $110 per share. The entry to record the transaction will consist of a debit to Cash for $2,200,000 and a credit or credits to a. Share Capital—Preference for $2,200,000. b. Share Premium-Preference for $2,000,000. c. Share Capital—Preference for $2,000,000 and Retained Earnings for $200,000. d. Share Capital—Preference for $2,000,000 and Share Premium—Preference for $200,000.

d. Share Capital—Preference for $2,000,000 and Share Premium—Preference for $200,000.

Treasury shares are a. shares issued by the U.S. Treasury Department. b. shares purchased by a corporation and held as an investment in its treasury. c. corporate shares issued by the treasurer of a company. d. a corporation's own shares which have been reacquired but not retired.

d. a corporation's own shares which have been reacquired but not retired.

Slaton Company originally issued 6,000 ordinary shares with a $10 par value for $90,000 ($15 per share). Slaton subsequently purchases 600 treasury shares for $27 per share and resells the 600 treasury shares for $29 per share. In the entry to record the sale of the treasury shares, there will be a a. credit to Share Capital-Ordinary for $16,200. b. credit to Treasury Shares for $6,000. c. debit to Share Premium-Ordinary of $18,000. d. credit to Share Premium-Treasury Shares for $1,200.

d. credit to Share Premium-Treasury Shares for $1,200.

Four thousand treasury shares of Meyer, Inc., previously acquired at $12 per share, are sold at $18 per share. The entry to record this transaction will include a a. credit to Treasury Shares for $72,000. b. debit to Share Premium-Treasury for $24,000. c. debit to Treasury Shares for $48,000. d. credit to Share Premium-Treasury for $24,000.

d. credit to Share Premium-Treasury for $24,000.

The cumulative effect of the declaration and payment of a cash dividend on a company's statement of financial position is to a. decrease current liabilities and equity. b. increase total assets and equity. c. increase current liabilities and equity. d. decrease equity and total assets.

d. decrease equity and total assets.

The cumulative effect of the declaration and payment of a cash dividend on a company's financial statements is to a. decrease total liabilities and equity. b. increase total expenses and total liabilities. c. increase total assets and equity. d. decrease total assets and equity.

d. decrease total assets and equity.

A corporate board of directors does not generally a. select officers. b. formulate operating policies. c. declare dividends. d. execute policy.

d. execute policy.

The declaration and distribution of a share dividend will a. increase total equity. b. increase total assets. c. decrease total assets. d.have no effect on total assets

d. have no effect on total assets.

If a corporation declares a dividend out of share capital or share premium, it is known as a a. scrip dividend. b. property dividend. c. paid dividend. d. liquidating dividend.

d. liquidating dividend.

If a corporation has only one class of shares, it is referred to as a. classless shares. b. preference shares. c. solitary shares. d. ordinary shares.

d. ordinary shares.

Each of the following is correct regarding treasury shares except that they have been a. issued. b. fully paid for. c. reacquired. d. retired.

d. retired.

Dividends in arrears on cumulative preference shares a. are considered to be a non-current liability. b. are considered to be a current liability. c. only occur when preference dividends have been declared. d. should be disclosed in the notes to the financial statements.

d. should be disclosed in the notes to the financial statements.

If a shareholder receives a dividend that reduces retained earnings by the fair value of the shares, the shareholder has received a a. large share dividend. b. cash dividend. c. contingent dividend. d. small share dividend.

d. small share dividend.

The face of a share certificate shows all of the following except a. the class of the share. b. the shareholder's name. c. the number of shares owned. d. the market value of the share.

d. the market value of the share.