On a bank reconciliation, bank service charges for the month are added to the cash
balance per the company records.
In general, retained earnings represents accumulated earnings of the corporation less
dividends paid.
The par value of stock is reduced when stock dividends are issued.
Why is the cash basis of accounting too limited for proper financial reporting?
If Accounts Receivable decreased during the year, then cash collections must have been
____________________ than sales on account for the period.
All intangible assets are subject to amortization.
Consider the following financial statement information:
2015 2014
Preferred Stock $4,500 $4,000
Total Stockholders’ Equity $49,050 $45,900
Net Income $10,002
Stock Price per Common Share $113
Common Dividends $521
Preferred Dividends $140
Purchases of Treasury Stock $8,061
Dividends per Common Share $1.30
Average Common Shares Outstanding 400
Calculate the following ratios:
– dividend yield;
– dividend payout;
– total payout; and
– stock repurchase payout.
What do profitability ratios measure?
The best response to an employee caught stealing from the company is to say, “Don”t
ever let me catch you doing that again!”
If preferred stock is participating, then the preferred shareholders have the right to share
in excess dividends above their stated dividend.
The current ratio is calculated as follows: Current Assets / Current Liabilities.
On the balance sheet, a company reports plant assets by subtracting residual value from
the original cost of the plant asset.
When plant assets are purchased in a group, each asset is debited to the respective plant
asset account for its fair market value at the time of acquisition.
Since dividends do not impact income, the dividends account is not closed to the
income summary account.