Chapter 5 - Share Capital and Retained Earnings
No entry is required on the ex-dividend date.
True
The liability for dividend is recorded at date of record.
False
The only source of share premium is the excess of consideration over par or stated value.
False
Total shareholders' equity represents a claim to specific assets contributed by the owners.
False
Treasury shares are assets of the corporation because the entry to record such involves a debit to treasury shares account and a credit to cash.
False
When a corporation issues no par value shares without stated value, it involves a credit to share capital and share premium.
False
When donated shares are retired, there is no effect in the corporation's equity.
False
When the corporation issues only one class of shares, it should be preference shares.
False
If the shares distributed are the entity's own shares, it is called as stock dividends.
True
Subscribers not declared as delinquent are entitled to receive cash dividends.
True
The corporation shall issue the stock certificate upon full payment of the subscriber.
True
The statement of Retained Earnings is not required per revised PAS 1.
True
Wasting asset corporations are allowed to include a return of capital as part of the dividends declared.
True
A share dividend does not affect the corporation's assets and liabilities.
True
Cash dividends are paid on the basis of outstanding shares.
True
Donated capital account is part of share premium.
True
Outstanding shares represent the largest number of common shares.
False
Reissuance of treasury shares cannot affect the balance of retained earnings.
False
Donated shares are accounted for the same way as donation of assets.
False
Donated shares are recorded at the fair value of the shares donated.
False
On the date of donation, the assets of the corporation increases in case of donated shares.
False
Dividend declaration is at the discretion of its stockholders.
False
If the method of accounting for share capital is not indicated, then assume the use of the Memorandum method.
True
For no-par shares, legal capital is the total consideration received by the corporation for the shares issued to its stockholders including the share premium or the excess of the issuance price over its stated value.
True
If income summary shows a debit excess, that represents the amount of net loss for the current reporting period.
True
