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Match the items below by entering the appropriate code letter in the space
provided.
____ 1> Net income retained in the corporation.
____ 2> The amount that must be retained in the business for the
protection of creditors.
____ 3> Preferred stockholders have a right to receive current and unpaid
prior-year dividends before common stockholders receive any dividends.
____ 4> Creditors only have corporate assets to satisfy their claims.
____ 5> Responsible to stockholders for corporate activity.
____ 6> The amount assigned to each share of stock in the corporate
charter.
____ 7> Unit of ownership in a corporation.
____ 8> Enables stockholders to maintain their same percentage ownership
when new shares are issued.
____ 9> Corporation's own stock that has been reacquired by the
corporation but not retired.
____ 10> Total amount paid-in on capital stock.
____ 11> A dividend declared out of paid-in capital.
____ 12> A pro rata distribution of cash to stockholders.
____ 13> A debit balance in retained earnings.
____ 14> A pro rata distribution of the corporation's own stock to
stockholders.
____ 15> Shows how many dollars of net income were earned for each
dollar invested by the owners.
____ 16> The date the board of directors formally declares the dividend
and announces it to stockholders.
____ 17> The issuance of additional shares of stock to stockholders
accompanied by a reduction in the par or stated value per share.
____ 18> Widely used by stockholders and potential investors in
evaluating the profitability of a company.
Answer:
Transactions are recorded in alphabetic order in a journal.
Answer:
Yeloe Corporation sells 400 shares of common stock being held as an investment. The
shares were acquired six months ago at a cost of $60 a share. Yeloe sold the shares for
$40 a share. The entry to record the sale is
Answer:
Buffalo Tom Cruises purchased a five-year insurance policy for its ships on April 1,
2015 for $60,000. Assuming that April 1 is the effective date of the policy, the adjusting
entry on December 31, 2015 is
Answer:
Errors occasionally occur when physically counting inventory items on hand. Identify
the financial statement effects of an overstatement of the ending inventory in the current
period. If the error is not corrected, how does it affect the financial statements for the
following year?
Answer:
What are the similarities and differences between the terms depreciation, depletion, and
amortization?
Answer:
