Details of each class of share capital should be reported

On the face of the statement of financial position or in disclosure notes.

On the face of the statement of financial position only.

On the face of the statement of comprehensive income and in disclosure notes.

Outstanding ordinary shares are

Shares in the hands of shareholders

Shares that are performing well on the Philippine Stock Exchange

Shares that have been authorized by the state for issue

Shares held in the corporate treasury

Issued shares refer to the number of shares

Outstanding plus treasury shares

That may be issued under state law

The share capital account is measured as

The shares issued multiplied by par value

The shares outstanding multiplied by par value

The shares outstanding multiplied by market value

The shares issued multiplied by book value

Total shareholders' equity represents

A claim against the total assets of an entity.

A claim against specific assets.

The maximum amount that can be borrowed.

Only the amount of retained earnings.

In accounting for shareholders' equity, the accountant is primarily concerned with which of the following?

Recording the source of each of the various elements of shareholders' equity

Determining the total amount of shareholders' equity

Distinguishing between realized and unrealized revenue

Making sure that the directors do not declare dividends in excess of retained earnings

The term residual owner means that ordinary shareholders

Bear the ultimate risks and uncertainties and receive the benefits of ownership.

Are entitled to a dividend every year in which the entity earns an income.

Can negotiate individual contracts for the entity.

Have the rights to specific assets of the entity.

The par value of an ordinary share represents

The amount received by the corporation when the share is originally issued.

The liquidation value of the share.

The legal nominal value assigned to the share.

Contributed capital does not include

Share premium on ordinary and preference shares

Share premium from reissuance of treasury shares

Discount on share capital

May be recorded as either an asset or an expense

May be offset against share premium on the same class

Should be closed to income summary account

Which is not one of the basic shareholders' rights?

The right to inspect the accounting records.

The right to maintain one's proportional interest.

The right to participate in earnings.

The right to participate in the proceeds of the sale of corporate assets upon liquidation of the corporation.

An ordinary shareholder does not possess which of the following?

The right to direct ownership of the corporate assets.

The right to share in the earnings of the corporation.

The right to share proportionately in corporate assets in case of liquidation.

The right to vote in the election of the board of directors.

The preemptive right of an ordinary shareholder is the right to

Share proportionately in any new issue of shares of the same class.

Share proportionately in corporate assets.

Exclude preference shareholders from voting rights.

Receive cash dividends annually.

Share premium is reported

As an increase in shareholders' equity

As a reduction of shareholders' equity

When shares traded on an active exchange are issued for an asset

An asset is recorded at the fair value of the shares.

No entry is recorded until restrictions are lifted.

An asset is recorded at the appraised value.

Share capital is increased by the appraised value of the asset.

When shares are issued in exchange for property, the best evidence of fair value might be any of the following, except

The average book value of outstanding shares.

The fair value of the property received.

The selling price of the shares in a recent transaction.

The price of the shares quoted on the stock exchange.

Ordinary shareholders usually have all, except

To share in the assets upon liquidation

To elect the board of directors

To participate in the day-to-day operations

When preference shares are retired by the issuer at a price below the original issue price, the transaction

Increases contributed capital of ordinary shareholders

Increases net income for the year

When preference shares carry a redemption privilege, the shareholders may

Surrender the preference shares for a specified amount of cash.

Purchase new shares when available.

Exchange their preference shares for ordinary shares.

An entity that issued shares of Class B should report the share capital

As equity unless the shares are mandatorily redeemable.

Among liabilities under all circumstances.

Among liabilities unless the shares are mandatorily redeemable.

As equity unless the shares are redeemable at the option of the issuer.

The issuance of preference shares a. b. c. d.

Increases preference shares outstanding

Has no effect on preference shares outstanding

Increases authorized preference share capital

Decreases authorized preference share capital

When an entity calls in all of the preference shares for more than the original issue price, the excess over the original issue price should be

Charged against retained earnings

Accounted for as loss on exchange

Charged against share premium of ordinary shares

Charged to a discount on preference shares

When preference shares are called in by the issuer for less than original issue price, proper accounting for the redemption

Increases the contributed capital of the ordinary shareholders

Increases the treasury shares held by the entity

Increases reported income for the period

Increases the amount of dividends available to ordinary shareholders

Convertible preference shares

Include an option for the holder to convert preference shares into a fixed number ordinary shares.

Are accounted for as financial liability

Are compound financial instrument.

All of the choices are correct.

Dividend paid on redeemable preference share shall be accounted for as

Interest expense as component of finance cost

Direct deduction from retained earnings

Component of other comprehensive income

The cost of treasury shares acquired for noncash consideration is usually measured by

Carrying amount of the noncash asset surrendered

Fair value of the treasury shares

Book value of the treasury shares

Fair value of the noncash asset surrendered

The total cost of treasury shares shall be reported as

Deduction from shareholders' equity

Deduction from retained earnings

If treasury shares are reissued for noncash consideration, the proceeds shall be measured by

Fair value of the treasury shares

Carrying amount of the treasury shares

"Loss" from sale of treasury shares shall be charged to

Share premium from treasury shares and then retained earnings

Loss on sale of treasury shares

Retained earnings and then share premium from treasury shares

Share premium from original issuance and then retained earnings

Loss on retirement of treasury shares is debited to

Share premium from original issuance, share premium from treasury shares and then retained earnings

Share premium from treasury shares and then retained earnings

Share premium from treasury shares, share premium from original issuance and then retained earnings

Shares issued exceed shares outstanding as a result of

Payment in full of subscribed shares

When treasury shares are sold at a price above cost

Contributed capital is increased

Which is incorrect in relation to treasury shares?

Treasury shares may be recognized as financial asset.

Treasury shares shall be recorded at cost.

The total cost of treasury shares shall be deducted from shareholders' equity.

Gain on sale of treasury shares is not recognized as income.

Only a memorandum is made when an entity

Entities issue rights to existing shareholders.

Gives warrants to executives as compensation.

Includes warrants to make a security more attractive.

All of the choices are correct.

Quiz 3 (IBT)

Authored by John Joson

Specialty

University

Used 7+ times

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63 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When shares with par value are sold, the excess of the proceeds over the par value is credited to

Share capital

Share premium

Retained earnings

Gain on issuance of shares

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When shares without par value are sold, the excess proceeds

over stated value shall be credited to

Retained earnings

Share premium

Share capital

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If shares are issued for a noncash consideration, the shares issued shall be measured by

Fair value of the shares

Par value of the shares

Fair value of the noncash consideration

Carrying amount of the noncash consideration

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If shares are issued to extinguish a financial liability, what is the initial measurement of the shares issued?

Par value of the shares

Fair value of the shares

Fair value of liability extinguished

Book value of the shares

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When shares are issued in payment for services, what is the least appropriate basis for recording the transaction?

Fair value of the services .

Par value of the shares

Fair value of the shares

Any of these provides an appropriate basis for recording the transaction

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the meaning of net assets of a corporation?

Contributed capital

Shareholders' equity

Retained earnings

Legal capital

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The two primary account classifications within shareholders' equity are

Preference shares and retained earnings

Par value of ordinary shares and retained earnings

Preference shares and ordinary shares

Contributed capital and retained earnings

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Quiz 3 (IBT)

When shares with par value are sold, the excess of the proceeds over the par value is credited to

When shares without par value are sold, the excess proceeds

If shares are issued for a noncash consideration, the shares issued shall be measured by

If shares are issued to extinguish a financial liability, what is the initial measurement of the shares issued?

When shares are issued in payment for services, what is the least appropriate basis for recording the transaction?

What is the meaning of net assets of a corporation?

The two primary account classifications within shareholders' equity are

Details of each class of share capital should be reported

The corporate charter is known as

Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following, except

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