Question 1

A corporation is owned by

Accepted Answer

A)   the individual who started the company.
B)   its board of directors.
C)   the president of the corporation.
D)   its stockholders.E) C) and D)
F) A) and B)

Question 2

Stock that carries special privileges or rights is called ____________________ stock.

Accepted Answer

The answer of Stock that carries special privileges or rights...

Question 3

An investor agrees to pay a preferred stock subscription in two monthly installments.Each collection will include a debit to Cash and a credit to

Accepted Answer

A)   Preferred Stock.
B)   Preferred Stock Subscribed.
C)   Subscriptions Receivable-Preferred.
D)   Common Stock Subscribed.E) All of the above
F) None of the above

Question 4

Common Stock Subscribed is an equity account.

Accepted Answer

A) True 
 B)False

Question 5

Venti Corporation has outstanding 100,000 shares of $50 par-value preferred stock,issued at an average price of $74 a share.The preferred stock is convertible into common stock at the rate of two shares of common stock for each share of preferred stock.Martin Spellman owns 100 shares of the preferred stock.During the current year he decides to convert 50 shares into common stock.How many shares of common stock will he receive?

Accepted Answer

The answer of Venti Corporation has outstanding 100,000 shares of...

Question 6

The stockholders of a corporation

Accepted Answer

A)   have no personal liability for the debts of the corporation.
B)   are agents of the corporation empowered to act for the firm.
C)   cannot sell their share of stock without obtaining the agreement of other stockholders.
D)   will receive a dividend each year.E) All of the above
F) A) and B)

Question 7

Which of the following statements is not correct?

Accepted Answer

A)   The Paid-in Capital in Excess of Par Value-Common Stock account appears in the Stockholders' Equity section of the balance sheet.
B)   The Subscriptions Receivable account is shown in the Stockholders' Equity section of the balance sheet.
C)   The balance of the Common Stock account appears in the Stockholders' Equity section of the balance sheet.
D)   The balance of the Preferred Stock account appears in the Stockholders' Equity section of the balance sheet.E) A) and C)
F) A) and D)

Question 8

Which of the following statements is correct?

Accepted Answer

A)   Shareholders have personal liability for a corporation's debts.
B)   Shareholders must obtain the consent of other shareholders to sell their shares or buy more shares.
C)   Limited liability partnership (LLP) partners have liability for their own actions and the actions of those under their control or supervision.
D)   Shareholders are legally prohibited from acting as an officer or employee of a corporation.E) B) and C)
F) C) and D)

Question 9

When shares of a corporation's stock are transferred from one investor to another,an entry is recorded in the capital stock transfer journal.

Accepted Answer

A) True 
 B)False

Question 10

The "preemptive right" enables shareholders to purchase an equivalent proportion of shares should the corporation issue additional common shares in the future.

Accepted Answer

A) True 
 B)False

Question 11

SanMartin Corporation has 300,000 shares of $10 par value,common shares authorized through its charter.250,000 shares were issued of which 225,000 shares are currently outstanding.The year-end market price of the stock was $70.Dividends paid at the end of the year were $3 per share.Calculate the total dividends paid.

Accepted Answer

The answer of SanMartin Corporation has 300,000 shares of $10...

Question 12

Callable preferred stock is the stock of another firm that a corporation has purchased as an investment.

Accepted Answer

A) True 
 B)False

Question 13

The number of shares of common stock that will be issued for each share of convertible preferred stock is referred to as the ___________________.

Accepted Answer

The answer of The number of shares of common stock...

Question 14

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

Accepted Answer

A) True 
 B)False

Question 15

A corporation has 10,000 shares of 6 percent,$50 par-value noncumulative preferred stock and 50,000 shares of $4 par-value common stock outstanding.Last year,no dividends were paid.This year,the board of directors decided to pay a dividend of $80,000.The common stockholders will receive a dividend of

Accepted Answer

A)   $0.40 a share.
B)   $1.00 a share.
C)   $1.60 a share.
D)   $2.00 a share.E) A) and B)
F) A) and C)

Question 16

A corporation received a subscription for 100 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $10,300 and a credit to

Accepted Answer

A)   Preferred Stock Subscribed for $10,300.
B)   Preferred Stock Subscribed for $10,000 and a credit to Gain on Sale of Preferred Stock for $300.
C)   Preferred Stock for $10,000 and a credit to Retained Earnings for $300.
D)   Preferred Stock Subscribed for $10,000 and a credit to Paid-in Capital in Excess of Par Value-Preferred Stock for $300.E) All of the above
F) A) and B)

Exam 20: Corporations: Formation and Capital Stock Transactions

Callable preferred stock is the stock of another firm that a corporation has purchased as an investment.

Correct Answer
verified

Stock that carries special privileges or rights is called ____________________ stock.

Correct Answer
verified

Which of the following statements is not correct?

Correct Answer
verified

When shares of a corporation's stock are transferred from one investor to another,an entry is recorded in the capital stock transfer journal.

Correct Answer
verified

A corporation received a subscription for 100 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $10,300 and a credit to

Correct Answer
verified

Correct Answer
verified

A corporation is owned by

Correct Answer
verified

The number of shares of common stock that will be issued for each share of convertible preferred stock is referred to as the ___________________.

Correct Answer
verified

The stockholders of a corporation

Correct Answer
verified

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

Correct Answer
verified

An investor agrees to pay a preferred stock subscription in two monthly installments.Each collection will include a debit to Cash and a credit to

Correct Answer
verified

The "preemptive right" enables shareholders to purchase an equivalent proportion of shares should the corporation issue additional common shares in the future.

Correct Answer
verified

Correct Answer
verified

Common Stock Subscribed is an equity account.

Correct Answer
verified

Correct Answer
verified

Which of the following statements is correct?

Correct Answer
verified

Exam 20: Corporations: Formation and Capital Stock Transactions

Callable preferred stock is the stock of another firm that a corporation has purchased as an investment.

Correct AnswerverifiedShow Answer

Stock that carries special privileges or rights is called ____________________ stock.

Correct AnswerverifiedShow Answer

Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

When shares of a corporation's stock are transferred from one investor to another,an entry is recorded in the capital stock transfer journal.

Correct AnswerverifiedShow Answer

A corporation received a subscription for 100 shares of 10 percent,$100 par-value preferred stock at $103 a share.The entry to record this transaction consists of a debit to Subscriptions Receivable-Preferred for $10,300 and a credit to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A corporation is owned by

Correct AnswerverifiedShow Answer

The number of shares of common stock that will be issued for each share of convertible preferred stock is referred to as the ___________________.

Correct AnswerverifiedShow Answer

The stockholders of a corporation

Correct AnswerverifiedShow Answer

The ability to convert preferred stock to common stock can make the preferred stock less attractive to investors.

Correct AnswerverifiedShow Answer

An investor agrees to pay a preferred stock subscription in two monthly installments.Each collection will include a debit to Cash and a credit to

Correct AnswerverifiedShow Answer

The "preemptive right" enables shareholders to purchase an equivalent proportion of shares should the corporation issue additional common shares in the future.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Common Stock Subscribed is an equity account.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified