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 agains share premium of ordinary shares

Charged to a discount on preference shares

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

Which is not one of the basic shareholders' rights?

The right to inspect the accounting records.

The right to participate in earnings.

The right to maintain one's proportional interest.

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

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.

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

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

Determining the total amount of shareholders' equity

Distinguishing between realized and unrealized revenue

Contributed capital does not include

Share premium from reissuance of treasury shares

Share premium on ordinary and preference shares

When collectability is reasonably assured, the excess of the subscription price over the stated value of no par ordinary share subscribed shall be recorded as

Share premium when the subscription is recorded.

Share premium when the ordinary share is issued.

Share premium when the subscription is collected.

The total cost of treasury shares shall be reported as

Deduction from shareholders' equity

Deduction from retained earnings

When treasury shares are purchased for more than par value, what account or accounts shall be debited?

Treasury shares for the purchase price

Treasury shares for the par value and retained earnings for excess of the purchase price over the par value.

Treasury shares for the par value and share premium for the excess of purchase price over the par value

Share premium for the purchase price

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 price of the shares quoted on the stock exchange.

The selling price of the shares in a recent transaction.

The fair value of the property received.

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 comprehensive income and in disclosure notes.

On the face of the statement of financial position only.

An ordinary shareholder does not possess which of the following?

The right to direct ownership of the corporate assets.

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

The right to share in the earnings of the corporation

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

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.

Which statement best describes the net effect on retained earnings of the purchase and subsequent sale of treasury shares?

Retained earnings sometimes may be increased but never decreased

Retained earnings may never be increased but sometimes decreased

Retained earnings account is always affected unless the sale price is exactly equal to cost

Retained earnings sometimes may never be increased or decreased

Discount on share capital

May be offset against share premium on the same class

May be recorded as either an asset or an expense

Should be closed to income summary account

The two primary account classifications within shareholders' equity are

Contributed capital and retained earnings

Preference shares and retained earnings

Preference shares and ordinary shares

Par value of ordinary shares and retained earnings

When shares without par value are sold, the excess proceeds

over stated value shall be credited to

Convertible preference shares

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

Are compound financial instrument.

Are accounted for as financial liability

All of the choices are correct.

Convertible preference shares

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

Are compound financial instrument.

Are accounted for as financial liability

All of the choices are correct.

Dividend paid on redeemable preference share shall be accounted for as

Direct deduction from retained earnings

Component of other comprehensive income

Interest expense as component of finance cost

Which is incorrect in relation to treasury shares?

Treasury shares may be recognized as financial asset.

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

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

Treasury shares shall be recorded at cost

Share premium is reported

As an increase in shareholders equity

As a reduction of shareholders' equity

Total shareholders' equity represents

A claim against the total assets of an entity.

A claim against specific assets.

Only the amount of retained earnings.

The maximum amount that can be borrowed.

The par value of an ordinary share represents

The legal nominal value assigned to the share.

The liquidation value of the share.

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

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

As equity unless the shares are mandatorily redeemable.

Among liabilities unless the sharesare mandatorily redeemable.

Among liabilities under all circumstances.

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

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

Any of these provides an appropriate basis for recording the transaction

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

Fair value of the noncash consideration

Carrying amount of the noncash consideration

Carrying amount of the treasury shares

Fair value of the treasury shares

Issued shares refer to the number of shares

Outstanding plus treasury shares

That may be issued under state law

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.

Ordinary shareholders usually have all, except

To participate in the day-to- day operations

To share in the assets upon liquidation

To elect the board of directors

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

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

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

An asset is recorded at the appraised value.

No entry is recorded until restrictions are lifted.

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

Reviewer for midterm (SHE)

Authored by Mark Mabalay

Business

University

Used 5+ times

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52 questions

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

Share split is issued primarily to

Induce a decline in market value per share

Increase the number of outstanding shares

Increase the number of authorized shares

Increase legal capital

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Loss on retirement of treasury shares is debited to

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

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

Retained earnings

Share premium from treasury shares and then retained earnings

MULTIPLE CHOICE QUESTION

1 min • 1 pt

What is the meaning of net assets of a corporation?

Legal capital

Shareholders' equity

Retained earnings

Contributed capital

MULTIPLE CHOICE QUESTION

1 min • 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 liability extinguished

Book value of the shares

Fair value of the shares

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Which is issued to shareholders to acquire unissued shares within a specified time at a specified price?

Share appreciation right

Share subscription

Share option

Share warrant

MULTIPLE CHOICE QUESTION

1 min • 1 pt

The share capital account is measured as

The shares issued multiplied by book value

The shares issued multiplied by par value

The shares outstanding multiplied by market value

The shares outstanding multiplied by par value

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Authorized share capital refers to the total number of shares

Issued

That can be issued

Outstanding

Issued and outstanding

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Reviewer for midterm (SHE)

Share split is issued primarily to

Loss on retirement of treasury shares is debited to

What is the meaning of net assets of a corporation?

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

Which is issued to shareholders to acquire unissued shares within a specified time at a specified price?

The share capital account is measured as

Authorized share capital refers to the total number of shares

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

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

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

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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