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Chapter 08 Accounting for and Presentation of Stockholders’ Equity
Answer Key
Multiple Choice Questions
1.
Which of the following is
not
a right or attribute of common stock ownership?
2.
Which of the terms is not used to identify owners’ equity or stockholders’ equity?
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3.
Which of the following is not a stockholders’ equity account?
4.
Another term frequently used to describe stockholders’ equity is:
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5.
Which of the following is one of the two generally practiced methods for electing corporate
directors?
6.
If a common stock has no par value:
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7.
When common stock has a par value:
8.
The dollar amount of the common stock on the balance sheet of a corporation that has
common stock with a par value is the number of shares:
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9.
Which of the following is
not
usually a right or attribute of preferred stock?
10.
Additional paid-in capital is most likely to appear on the balance sheet of a corporation
that:
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11.
Retained earnings represents:
12.
Preferred stock is used much less than long-term debt in the capital structure of most
industrial and merchandising companies principally because:
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13.
The annual per share dividend requirement of a 6%, $100 par value preferred stock that
was issued for $105 is:
14.
The number of shares of a class of stock that are outstanding is:
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15.
A stock dividend is similar to a cash dividend in that:
16.
Factors that usually affect retained earnings directly include:
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17.
In comparison to the stockholders’ equity section of a corporation’s balance sheet, owners’
equity of a proprietorship or partnership:
18.
The
declaration
of a cash dividend by the directors results in:
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19.
In most states, par value of issued shares represents:
20.
The term preemptive right pertains to which of the following?
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21.
Balance sheet disclosures for preferred stock include all of the following except:
22.
The
declaration
date pertains to:
23.
Spike Jones owns 112 shares of the Robust Corporation’s stock. Robust announces a 3–
for-2 stock split. How many shares will Fred have after this split?
24.
Braco has 80,000 shares of $100 par value common stock outstanding, and 20,000 shares
in the treasury. The number of additional shares that would be issued in a 5% stock
dividend is:
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25.
When a stock dividend is declared and issued:
26.
When a company splits its common stock 3 for 1:
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27.
The principal reason for a company having a common stock split is to:
28.
When a firm purchases its own shares as treasury stock: