Question 1

Supervox Corporation declared a 3-for-2 common stock split,but this transaction was erroneously recorded as a 50% common stock dividend.As a result:

Accepted Answer

A)  Retained earnings is understated.
B)  The total dollar amount of stockholders' equity is overstated.
C)  The corporate records do not show the correct number of shares of common stock outstanding.
D)  The common stock account is understated.E) A) and B)
F) A) and D)

Question 2

When a stock dividend is declared,total stockholders' equity will:

Accepted Answer

A)  Decrease.
B)  Increase.
C)  Not change.
D)  Increase or decrease,depending upon whether it's a small or large stock dividend.E) C) and D)
F) A) and B)

Question 3

Earnings per share is equal to net income applicable to common stock,divided by the weighted number of common shares outstanding.

Accepted Answer

A) True 
 B)False

Question 4

Stock dividends
What is the effect of a stock dividend?

Accepted Answer

Stock dividends do not change total asse...

Question 5

The numerator in calculating earnings per share is reduced for:

Accepted Answer

A)  Noncumulative preferred dividends declared.
B)  Common dividends.
C)  Common stock dividends.
D)  Any form of dividend.E) A) and D)
F) A) and C)

Question 6

Which of the following would not be used in computing diluted earnings per share?

Accepted Answer

A)  Preferred stock.
B)  Convertible bonds.
C)  Stock options.
D)  Weighted-average number of shares of common stock outstanding during the year.E) A) and B)
F) None of the above

Question 7

The purpose of developing the subtotals "Income before Extraordinary Items" and "Income from Continuing Operations" in an income statement is to:

Accepted Answer

A)  Assist investors in forecasting future operating results.
B)  Increase the amount of reported net income.
C)  Decrease the amount of income subject to income taxes.
D)  Provide investors with the information necessary to compute earnings per share.E) B) and D)
F) B) and C)

Question 8

In determining earnings per share when a p

Accepted Answer

A) True 
 B)False

Question 9

For the current year,Voque Company reported basic earnings per share of $8 and diluted earnings per share of $3.The difference between these figures is attributable to outstanding shares of convertible p

Accepted Answer

A)  $8.
B)  $5.
C)  $3.
D)  Cannot be determined.E) B) and C)
F) C) and D)

Question 10

Which of the following items would be included in the discontinued operations section of the income statement?

Accepted Answer

A)  Income or loss from operating the segment prior to its disposal.
B)  The gain or loss on disposal of the segment.
C)  Both the income or loss from operating the segment prior to its disposal,and the gain or loss on disposal of the segment.
D)  Only losses and not gains on the disposal of a segment.E) B) and C)
F) None of the above

Question 11

The date on a statement of retained earnings is at a point in time; such as,at December 31,2015.

Accepted Answer

A) True 
 B)False

Question 12

A small stock dividend is recorded at:

Accepted Answer

A)  Market value.
B)  Book value.
C)  Par value.
D)  No amount,just a memorandum entry is required.E) B) and D)
F) A) and B)

Question 13

Which of the following would have no effect on Retained Earnings?

Accepted Answer

A)  Declaration of a cash dividend.
B)  Declaration of a stock dividend.
C)  Declaration of a stock split.
D)  A prior period adjustment.E) A) and B)
F) B) and C)

Question 14

Diluted earnings per share represents a hypothetical case,showing what earnings per share would be if certain securities were converted into additional shares of common stock.

Accepted Answer

A) True 
 B)False

Question 15

To receive the next cash dividend,an investor must purchase the stock before the:

Accepted Answer

A)  Dividend declaration date.
B)  Ex-dividend date.
C)  Date of record.
D)  Payment date announced by the board of directors.E) None of the above
F) All of the above

Question 16

Dividends are first recorded and retained earnings are reduced on:

Accepted Answer

A)  The ex-dividend date.
B)  The date of record.
C)  The date of declaration.
D)  The date of payment.E) A) and D)
F) C) and D)

Question 17

A stock dividend provides a stockholder with more shares of stock,but his or her percentage of ownership in the company is no larger than before.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following items would not reduce retained earnings?

Accepted Answer

A)  A common stock dividend.
B)  A preferred stock dividend.
C)  A cash dividend.
D)  Cash payment of a previously declared dividend.E) C) and D)
F) B) and D)

Question 19

Stockholders' equity
The stockholders' equity section of the balance sheet of Nautilus Corporation at December 31,2015,appears as follows:  Answer the following questions based on the stockholders' equity section given above.Each question is a separate situation,unless otherwise indicated.
(a)What is the total dollar amount paid annually as dividends to p

Accepted Answer

(a)$100 par × 8% × 14,000 shares = $112,...

Question 20

Large stock dividends tend to:

Accepted Answer

A)  Increase stock prices.
B)  Have no effect upon stock prices.
C)  Keep stock prices down.
D)  Decrease total assets.E) B) and D)
F) B) and C)

Exam 12: Income and Changes in Retained Earnings

Supervox Corporation declared a 3-for-2 common stock split,but this transaction was erroneously recorded as a 50% common stock dividend.As a result:

Correct Answer
verified

When a stock dividend is declared,total stockholders' equity will:

Correct Answer
verified

Stock dividends What is the effect of a stock dividend?

Correct Answer
verified
Stock dividends do not change total asse...
View Answer

The purpose of developing the subtotals "Income before Extraordinary Items" and "Income from Continuing Operations" in an income statement is to:

Correct Answer
verified

Which of the following items would not reduce retained earnings?

Correct Answer
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Which of the following would not be used in computing diluted earnings per share?

Correct Answer
verified

Diluted earnings per share represents a hypothetical case,showing what earnings per share would be if certain securities were converted into additional shares of common stock.

Correct Answer
verified

The date on a statement of retained earnings is at a point in time; such as,at December 31,2015.

Correct Answer
verified

Dividends are first recorded and retained earnings are reduced on:

Correct Answer
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In determining earnings per share when a p

Correct Answer
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For the current year,Voque Company reported basic earnings per share of $8 and diluted earnings per share of $3.The difference between these figures is attributable to outstanding shares of convertible p

Correct Answer
verified

A stock dividend provides a stockholder with more shares of stock,but his or her percentage of ownership in the company is no larger than before.

Correct Answer
verified

Large stock dividends tend to:

Correct Answer
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Which of the following would have no effect on Retained Earnings?

Correct Answer
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Correct Answer
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(a)$100 par × 8% × 14,000 shares = $112,...
View Answer

Earnings per share is equal to net income applicable to common stock,divided by the weighted number of common shares outstanding.

Correct Answer
verified

The numerator in calculating earnings per share is reduced for:

Correct Answer
verified

Which of the following items would be included in the discontinued operations section of the income statement?

Correct Answer
verified

To receive the next cash dividend,an investor must purchase the stock before the:

Correct Answer
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A small stock dividend is recorded at:

Correct Answer
verified

Exam 12: Income and Changes in Retained Earnings

Supervox Corporation declared a 3-for-2 common stock split,but this transaction was erroneously recorded as a 50% common stock dividend.As a result:

Correct AnswerverifiedShow Answer

When a stock dividend is declared,total stockholders' equity will:

Correct AnswerverifiedShow Answer

Stock dividends What is the effect of a stock dividend?

Correct AnswerverifiedStock dividends do not change total asse...View AnswerShow Answer

The purpose of developing the subtotals "Income before Extraordinary Items" and "Income from Continuing Operations" in an income statement is to:

Correct AnswerverifiedShow Answer

Which of the following items would not reduce retained earnings?

Correct AnswerverifiedShow Answer

Which of the following would not be used in computing diluted earnings per share?

Correct AnswerverifiedShow Answer

Diluted earnings per share represents a hypothetical case,showing what earnings per share would be if certain securities were converted into additional shares of common stock.

Correct AnswerverifiedShow Answer

The date on a statement of retained earnings is at a point in time; such as,at December 31,2015.

Correct AnswerverifiedShow Answer

Dividends are first recorded and retained earnings are reduced on:

Correct AnswerverifiedShow Answer

In determining earnings per share when a p

Correct AnswerverifiedShow Answer

For the current year,Voque Company reported basic earnings per share of $8 and diluted earnings per share of $3.The difference between these figures is attributable to outstanding shares of convertible p

Correct AnswerverifiedShow Answer

A stock dividend provides a stockholder with more shares of stock,but his or her percentage of ownership in the company is no larger than before.

Correct AnswerverifiedShow Answer

Large stock dividends tend to:

Correct AnswerverifiedShow Answer

Which of the following would have no effect on Retained Earnings?

Correct AnswerverifiedShow Answer

Correct Answerverified(a)$100 par × 8% × 14,000 shares = $112,...View AnswerShow Answer

Earnings per share is equal to net income applicable to common stock,divided by the weighted number of common shares outstanding.

Correct AnswerverifiedShow Answer

The numerator in calculating earnings per share is reduced for:

Correct AnswerverifiedShow Answer

Which of the following items would be included in the discontinued operations section of the income statement?

Correct AnswerverifiedShow Answer

To receive the next cash dividend,an investor must purchase the stock before the:

Correct AnswerverifiedShow Answer

A small stock dividend is recorded at:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Stock dividends do not change total asse...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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(a)$100 par × 8% × 14,000 shares = $112,...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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