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Chapters 1-4 The Accounting Cycle
Chapters 5-8 Current Assets
Chapters 9-11 Long-Term Assets
Chapters 12-14 Liabilities/Equities
Chapters 15-16 Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20 Managerial/Cost
Chapters 21-24 Budgeting/Decisions

Chapter 14 - Multiple Choice

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Chapter 14 – Multiple Choice

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Question 1 of 8

1. Question
Which of the following characteristics is considered to be an advantage of the corporate form of organization?
- Avoidance of double taxation
- Limited liability of stockholders
- Low level of regulation
- The absence of a perpetual existence
Correct

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Question 2 of 8

2. Question
Of the following characteristics, which is generally not regarded as a right of common shareholders?
- Preemptive right
- Voting rights
- Preference in liquidation
- Transferability of shares
Correct

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Question 3 of 8

3. Question
If 1,000 shares of $10 par-value common stock are issued in exchange for land with a fair market value of $25,000, the land and common stock (along with any additional paid-in capital) should be recorded at:
- $0
- $1,000
- $10,000
- $25,000
Correct

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Question 4 of 8

4. Question
Jackson Corporation has 500,000 shares of common stock outstanding. On April 10, the board of directors declared a $0.60 per share cash dividend, to be paid to stockholders of record on April 25. The dividend was distributed on June 6. The proper journal entry to record on June 6 is:
- Dividends Expense 300,000
  
  Cash 300,000
- Dividends Payable 300,000
  
  Cash 300,000
- Retained Earnings 300,000
  
  Cash 300,000
- Dividends Payable 300,000
  
  Retained Earnings 300,000
Correct

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Question 5 of 8

5. Question
Dividends omitted on preferred shares that must be paid before common shareholders are entitled to be paid are referred to as:
- Participating
- Callable
- Cumulative
- In arrears
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Question 6 of 8

6. Question
Magic Corporation paid $100,000 in dividends. The corporation had 10,000 shares of common stock outstanding and 5,000 shares of $100 par value 5% preferred stock. The preferred stock was two years in arrears prior to the current year. How much was paid to the common stockholders?
- $0
- $25,000
- $50,000
- $75,000
Correct

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Question 7 of 8

7. Question
Which of the following statements about treasury stock is false?
- Gains are not recorded on treasury stock transactions, but losses are.
- Acquiring treasury stock causes stockholders' equity to decrease.
- Treasury stock is reported as a deduction from stockholders' equity.
- The excess of the sales price of treasury stock over its cost should be credited to Paid-in Capital from Treasury Stock.
Correct

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Question 8 of 8

8. Question
Elmer Company has 500,000 shares of common stock authorized. The stock has a par value of $1.50 per share, and 150,000 shares are outstanding. The company declared a 5% stock dividend at a time when the market value was $7 per share. What entry, if any, should Elmer record for the declaration?
- No entry
- Retained Earnings 11,250
  
  Common Stock 11,250
- Retained Earnings             52,500
  
               Stock Dividend Distributable             11,250
  
               Paid-in Capital in Excess of Par             41,250
- Stock Dividends Payable            11,250
  
  Retained Earning             41,250
  
                           Common Stock             52,500
Correct

Incorrect

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Chapters 1-4
Chapters 5-8
Chapters 9-11
Chapters 12-14
Chapters 15-16
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20
Chapters 21-24
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