Chapter 11

1.
	A corporation issues 1,500 shares of common stock for $ 32,000. The stock has a stated value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for Student Response Value Correct Answer Feedback 1. $15,000 100% 2. $17,000 3. $32,000 4. $2,000 Score: 1/1
2.
	Some corporations have stopped issuing stock certificates to stockholders. Student Response Value Correct Answer Feedback 1. True 100% 2. False Score: 1/1
3.
	The ability of a corporation to obtain capital is Student Response Value Correct Answer Feedback 1. about the same as a partnership. 2. restricted because of the limited life of the corporation. 3. enhanced because of limited liability and ease of share transferability. 100% 4. less than a partnership. Score: 1/1
4.
	While some businesses have been granted charters under state laws, most businesses receive their charters under federal laws. Student Response Value Correct Answer Feedback 1. True 0% 2. False Score: 0/1
5.
	The journal entry to issue 1,000,000 shares of $6 par common stock for $8.00 per share on January 2nd would be: Student Response Value Correct Answer Feedback 1. Jan 2 Cash 6,000,000 Paid-In Capital in Excess of Par - C/S 2,000,000 Common Stock 8,000,000 2. Jan 2 Cash 8,000,000 Common Stock 6,000,000 Paid-In Capital in Excess of Par - C/S 2,000,000 3. Jan 2 Cash 1,000,000 Common Stock 1,000.000 0% 4. Jan 2 Cash 6,000,000 Common Stock 6,000,000 Score: 0/1
6.
	The date on which a cash dividend becomes a binding legal obligation is on the Student Response Value Correct Answer Feedback 1. payment date. 2. date of record. 3. last day of the fiscal year end. 4. declaration date. 100% Score: 1/1
7.
	Treasury stock which was purchased for $3,000 is sold for $3,500. As a result of these two transactions combined Student Response Value Correct Answer Feedback 1. income will be increased by $500 2. stockholders' equity will be increased by $3,500 3. stockholders' equity will not change 4. stockholders' equity will be increased by $500 100% Score: 1/1
8.
	Treasury stock should be reported in the financial statements of a corporation as a(n) Student Response Value Correct Answer Feedback 1. liability. 2. deduction from total paid-in capital. 3. deduction from total paid-in capital and retained earnings. 100% 4. investment. Score: 1/1
9.
	A restriction/appropriation of retained earnings Student Response Value Correct Answer Feedback 1. decreases total retained earnings 0% 2. increases total retained earnings 3. decreases total assets 4. has no effect on total retained earnings Score: 0/1
10.
	A corporation has 12,000 shares of $20 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately $50. Student Response Value Correct Answer Feedback 1. True 2. False 100% Score: 1/1
11.
	A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease. Student Response Value Correct Answer Feedback 1. False 0% 2. True Score: 0/1
12.
	The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 45,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared? Student Response Value Correct Answer Feedback 1. $80,000 2. $90,000 0% 3. $10,000 4. $100,000 Score: 0/1
13.
	The journal entry to issue 1,000,000 shares of $5 par common stock for $6.75 per share on January 2nd would be: Student Response Value Correct Answer Feedback 1. Jan 2 Cash 5,000,000 Common Stock 5,000,000 2. Jan 2 Cash 6,750,000 Common Stock 5,000,000 Paid-In Capital in Excess of Par - C/S 1,750,000 100% 3. Jan 2 Cash 1,000,000 Common Stock 1,000,000 4. Jan 2 Cash 5,000,000 Paid-In Capital in Excess of Par - C/S 1,750,000 Common Stock 6,750,000 Score: 1/1
14.
	Which one of the following would not be considered an advantage of the corporate form of organization? Student Response Value Correct Answer Feedback 1. Continuous life 2. Limited liability of stockholders 0% 3. Government regulation 4. Separate legal existence Score: 0/1
15.
	On January 1, 20xx, Swenson Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Swenson purchased 3,000 shares of treasury stock for $21 per share and later sold the treasury shares for $24 per share on March 1, 20xx. The journal entry to record the purchase of the treasury shares on February 1, 20xx, would include a Student Response Value Correct Answer Feedback 1. credit to a gain account for $9,000. 2. debit to a loss account for $9,000 3. debit to Treasury Stock for $63,000. 100% 4. credit to Treasury Stock for $63,000. Score: 1/1
16.
	Those most responsible for the major policy decisions of a corporation are the Student Response Value Correct Answer Feedback 1. stockholders. 2. management. 3. board of directors. 100% 4. employees. Score: 1/1
17.
	A corporation can be organized for the purpose of making a profit or it may be nonprofit. Student Response Value Correct Answer Feedback 1. False 2. True 100% Score: 1/1
18.
	The two ways that a corporation can be classified by ownership are Student Response Value Correct Answer Feedback 1. for profit or not-for-profit. 100% 2. stock and non-stock. 3. majority and minority. 4. inside and outside. Score: 1/1
19.
	The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 60,000 shares were originally issued and 10,000 were subsequently reacquired. What is the number of shares outstanding? Student Response Value Correct Answer Feedback 1. 40,000 0% 2. 50,000 3. 70,000 4. 60,000 Score: 0/1
20.
	Organizational expenses are classified as intangible assets on the balance sheet. Student Response Value Correct Answer Feedback 1. False 2. True 0% Score: 0/1