Test 2 ACC

Shares that have been sold and are in the hands of stockholders are called:

• Outstanding

• Issued

• Treasury

• Lindenwritten

Which of the following is NOT a characteristic of the corporate form of organization?

• The owners of the corporation cannot lose more than the amount they invested

• Shares of stock in a corporation are more rapidly referable than is an interest in a partnership

• Stockholders have authority to decide by majority vote the amount of dividends to be paid.

• The corporation is very a efficient vehicle for obtaining large amounts of capital required for a large scale production

Public Corporations are required by law to perform the following except

• Submit much of their financial information to the SEC

• Make Regulator scheduled dividend payments to all stockholders

• Have there annual finical statements audited by an independent CPA

• Disclose their finical information to the public.

The entry recorded the issuance of common stock at a price below par value includes

• A credit to cash

• A credit to Liability account for the difference between the price paid by the stockholders and the par value of the stock

• A credit to Additional Paid in Capital: Common stock

• A debit to common stock

If the preferred stock of a corporation is cumulative:

• dividends on preferred stock are guaranteed

• dividends cannot be declared in an amount less than that stated on the stock certificate

• Preferred stockholders participate in dividends paid in excess of a stated amount on the common shares

• Dividends in arrears must be paid on preferred stock before any dividend can be paid on common stock

Preferred Stock 600,000

Common Stock 900,000

Additional Paid preferred stock 60,000

Additional paid in common stock 1,500,000

Retained Earnings 1,090,000

The total amount paid in capital is:

• 1,960,000

• 1,090,000

• 3,460,000

• 1,950,000

Cumulative stock 1.30 par. 100,000 shares authorized. 10,000 shares issued.

Common stock 1.25 par. 1,000,000 shares authorized. 600,000 shares issued, of which 6,000 are held in treasury.

How many shares of common stock are outstanding

• 600,000

• 606,000

• 594,000

• 1,000,000

Preferred stock at 100 par cumulative 100,000 shares authorized $540,000

Common stock 2 Par 400,000 shares authorized $ 641,000

Refer to the information above. How many shares of Preferred stock are outstanding

• 32,000 shares

• 5,400 shares

• 10,000 shares

• cannot be determined

Treasury stock appears as an

• Asset account

• Liability account

• Expense account

• Equity account

On January 31, 2009, Village Bank had 500,000 shares of $2 par value common stock outstanding. On that date, the company declared a 14% stock dividend when the market price of the stock was $37 per share. The immediate effect of this dividend upon Village Bank was:

• A reduction in cash of $2,590,000

• A reduction in retained earnings of $2,590,000

• A reduction in retained earnings of $140,000

• A liability to the stockholders of $140,000