18 Oct Stockholders of a corporation directly elect
Stockholders of a corporation directly elect
the treasurer of the corporation.
all of the employees of the corporation.
the board of directors.
the president of the corporation.
Those most responsible for the major policy decisions of a corporation are the
stockholders.
employees.
board of directors.
management.
The two ways that a corporation can be classified by ownership are
inside and outside.
publicly held and privately held.
stock and non-stock.
majority and minority.
Which of the following statements concerning taxation is accurate?
Corporations pay federal and state income taxes.
Corporations pay federal income taxes but not state income taxes.
Only the owners must pay taxes on corporate income.
Partnerships pay state income taxes but not federal income taxes.
Par value
is the value assigned per share in the corporate charter.
represents what a share of stock is worth.
represents the original selling price for a share of stock.
is established for a share of stock after it is issued.
A corporation has the following account balances: Common Stock, $1 par value, $70000; Paid-in Capital in Excess of Par Value, $2640000. Based on this information, the
average price per share issued is $3.87.
legal capital is $2710000.
number of shares outstanding is 2710000.
number of shares issued is 70000.
The amount of stock that may be issued according to the corporation’s charter is referred to as the
issued stock.
authorized stock.
outstanding stock.
unissued stock.
If common stock is issued for an amount greater than par value, the excess should be credited to
Paid-in Capital in Excess of Par Value.
Retained Earnings.
Legal Capital.
Cash.
Bramble Corp. issued 6000 shares of stock at a stated value of $10/share. The total issue of stock sold for $17/share. The journal entry to record this transaction would include a
credit to Paid-in Capital in Excess of Par Value for $42000.
debit to Cash for $60000.
credit to Common Stock for $60000.
credit to Common Stock for $102000.
Treasury stock is
stock issued by the U.S. Treasury Department.
corporate stock issued by the treasurer of a company.
stock purchased by a corporation and held as an investment in its treasury.
a corporation’s own stock, which has been reacquired and held for future use.
Current Attempt in Progress
The per share amount normally assigned by the board of directors to a small stock dividend is
the par or stated value of the stock.
zero.
the average price paid by stockholders on outstanding shares.
the market value of the stock on the date of declaration.
The statement of cash flows
is another name for the income statement.
is a special section of the income statement.
summarizes the operating, financing, and investing activities of an entity.
must be prepared on a daily basis.
Cash receipts from interest and dividends are classified as
either financing or investing activities.
operating activities.
financing activities.
investing activities.
The payment of a cash dividend would be classified as a(n)
investing activity.
significant noncash activity.
financing activity.
operating activity
Comparisons of financial data made within a company are called
interior comparisons.
industry comparisons.
intercompany comparisons.
intracompany comparisons.
Which one of the following is not a tool in financial statement analysis?
Horizontal analysis
Vertical analysis
Ratio analysis
Circular analysis
Which of the following income statement figures would probably be the best indicator of a company’s future performance?
Income from operations
Gross profit
Total revenues
Net income
Which of the following is the best definition of sustainable income?
Sustainable income is income that is unusual in nature and infrequent in occurrence.
Sustainable income is the same as net income.
Sustainable income is a measure of solvency that does not include capital expenditure.
Sustainable income is the most likely level of income to be obtained in the future.
The order of presentation of items that may appear on the statement income of comprehensive income is
Other comprehensive income, Discontinued operations, Income before income taxes.
Income before income taxes, Discontinued operations, Other comprehensive income.
Discontinued operations, Other comprehensive income, Income before income taxes.
Income before income taxes, Other comprehensive income, Discontinued operations.
When retained earnings are restricted, total retained earnings
decrease.
are unaffected.
may increase or decrease.
increase.
Kingbird, Inc. had retained earnings of $16900 on the balance sheet but disclosed in the footnotes that $1990 of retained earnings was restricted for plant expansion and $1100 was restricted for bond repayments. Cash of $1990 had been set aside for the plant expansion. How much of retained earnings is available for dividends?
$14910.
$11820.
$16900.
$13810.
Assume that the Park Corporation uses the indirect method to depict cash flows. Indicate where, if at all, an accounts receivable decrease would be classified on the statement of cash flows.
Financing activities section.
Operating activities section.
Investing activities section.
Does not represent a cash flow.
Assume that the Zahler Corporation uses the indirect method to depict cash flows. Indicate where, if at all, treasury stock purchased with cash would be classified on the statement of cash flows.
Financing activities section.
Investing activities section.
Does not represent a cash flow.
Operating activities section.
Cash from operations and net income are approximately the same during the
decline phase.
growth phase.
maturity phase.
introductory phase.
Free cash flow provides an indication of a company’s ability to
generate cash to invest in capital expenditures and to pay dividends.
generate net income.
generate cash to pay dividends.
generate cash to invest in capital expenditures.
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