Question 1

The balance sheet of a sole proprietorship will report two equity accounts: one for amounts contributed by the owner,and one for the earnings of the business.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Accepted Answer

A)  A corporation
B)  A municipality
C)  A sole proprietorship
D)  A partnershipE) None of the above
F) A) and B)

Question 3

How is the price-earnings ratio calculated?

Accepted Answer

A)  Market price per share of stock divided by earnings per share
B)  The interest rate on borrowed money divided by the current prime rate
C)  The price of a company's products as compared to its net income
D)  The market value of a company's stock divided by average earnings over the past three yearsE) All of the above
F) A) and D)

Question 4

Preferred stockholders' claims to a corporation's assets take precedence over the claims of some creditors.

Accepted Answer

A) True 
 B)False

Question 5

How does the issuance of a common stock dividend normally impact the calculation of a company's price-earnings (P/E) ratio?

Accepted Answer

A)  It decreases the P/E ratio.
B)  It would not be expected to impact the P/E ratio.
C)  It increase the P/E ratio.
D)  The impact on the P/E ratio cannot be determined.E) None of the above
F) A) and D)

Question 6

Which of the following best describes how each share of par value stock issued is reported in the Common Stock account?

Accepted Answer

A)  Current market value
B)  Average issue price
C)  Par or stated value
D)  Lower of cost or marketE) B) and D)
F) A) and D)

Question 7

A corporation is a legal entity created by the authority of a state government,separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 8

The Securities and Exchange Commission (SEC)has the authority to set and enforce auditing,attestation,quality control,and ethics standards for auditors of public companies.

Accepted Answer

A) True 
 B)False

Question 9

On March 1, Year 1, Gilmore Incorporated declared a cash dividend on its 1,500 outstanding shares of $50 par value, 6% preferred stock. The dividend will be paid on May 1, Year 1 to the stockholders of record as of April 1, Year 1.

-How will the May 1 payment of the dividend affect the elements of the financial statements?

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option DE) C) and D)
F) B) and C)

Question 10

Kellogg,Inc.purchased 200 shares of its own $20 par value stock for $30 cash per share.Which of the following answers reflects how this purchase of treasury stock would affect the elements of Kellogg's financial statements?

Accepted Answer

A)  Option A
B)  Option B
C)  Option C
D)  Option DE) None of the above
F) All of the above

Question 11

A corporation must record a liability for cash dividends on the date of record.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements is a reason why a company would buy treasury stock?

Accepted Answer

A)  Because management believes the market price of the stock is undervalued.
B)  To have stock available to issue to employees in stock option plans.
C)  To avoid a hostile takeover.
D)  All of these are reasons a company would buy treasury stock.E) B) and C)
F) All of the above

Exam 11: Proprietorships,partnerships,and Corporations

Preferred stockholders' claims to a corporation's assets take precedence over the claims of some creditors.

Correct Answer
verified

Correct Answer
verified

A corporation must record a liability for cash dividends on the date of record.

Correct Answer
verified

Which of the following best describes how each share of par value stock issued is reported in the Common Stock account?

Correct Answer
verified

How is the price-earnings ratio calculated?

Correct Answer
verified

Which of the following statements is a reason why a company would buy treasury stock?

Correct Answer
verified

The balance sheet of a sole proprietorship will report two equity accounts: one for amounts contributed by the owner,and one for the earnings of the business.

Correct Answer
verified

Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Correct Answer
verified

A corporation is a legal entity created by the authority of a state government,separate and distinct from its owners.

Correct Answer
verified

The Securities and Exchange Commission (SEC)has the authority to set and enforce auditing,attestation,quality control,and ethics standards for auditors of public companies.

Correct Answer
verified

How does the issuance of a common stock dividend normally impact the calculation of a company's price-earnings (P/E) ratio?

Correct Answer
verified

Kellogg,Inc.purchased 200 shares of its own $20 par value stock for $30 cash per share.Which of the following answers reflects how this purchase of treasury stock would affect the elements of Kellogg's financial statements?

Correct Answer
verified

Exam 11: Proprietorships,partnerships,and Corporations

Preferred stockholders' claims to a corporation's assets take precedence over the claims of some creditors.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A corporation must record a liability for cash dividends on the date of record.

Correct AnswerverifiedShow Answer

Which of the following best describes how each share of par value stock issued is reported in the Common Stock account?

Correct AnswerverifiedShow Answer

How is the price-earnings ratio calculated?

Correct AnswerverifiedShow Answer

Which of the following statements is a reason why a company would buy treasury stock?

Correct AnswerverifiedShow Answer

The balance sheet of a sole proprietorship will report two equity accounts: one for amounts contributed by the owner,and one for the earnings of the business.

Correct AnswerverifiedShow Answer

Which of the following entities would have a "Paid-in Capital in Excess" account in the equity section of the balance sheet?

Correct AnswerverifiedShow Answer

A corporation is a legal entity created by the authority of a state government,separate and distinct from its owners.

Correct AnswerverifiedShow Answer

The Securities and Exchange Commission (SEC)has the authority to set and enforce auditing,attestation,quality control,and ethics standards for auditors of public companies.

Correct AnswerverifiedShow Answer

How does the issuance of a common stock dividend normally impact the calculation of a company's price-earnings (P/E) ratio?

Correct AnswerverifiedShow Answer

Kellogg,Inc.purchased 200 shares of its own $20 par value stock for $30 cash per share.Which of the following answers reflects how this purchase of treasury stock would affect the elements of Kellogg's financial statements?

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