Question 1. Which one of the following would not be considered an advantage

29 Jun Question 1. Which one of the following would not be considered an advantage

Question
1.

Which one of the following would not be considered an advantage of the corporate form of organization?

A)

Limited liability of owners

B)

Separate legal existence

C)

Continuous life

D)

Government regulation

2.

The par value of a stock

A)

is legally significant.

B)

reflects the most recent market price.

C)

is selected by the SEC.

D)

is indicative of the worth of the stock.

3.

A separate paid-in capital account is used to record each of the following except the issuance of

A)

no-par stock.

B)

par value stock.

C)

stated value stock.

D)

treasury stock above cost.

4.

Paid-In Capital in Excess of Stated Value

A)

is credited when no-par stock does not have a stated value.

B)

is reported as part of paid-in capital on the balance sheet.

C)

represents the amount of legal capital.

D)

normally has a debit balance.

5.

The _______________ feature of preferred stock gives the preferred stockholders the right to receive current-year dividends and unpaid prior-year dividends before common stockholders receive any dividends.

6.

In the financial statements, organization costs appears

A)

immediately below Retained Earnings in the stockholders’ equity section.

B)

in the income statement.

C)

as part of paid-in capital in the stockholders’ equity section.

D)

as an intangible asset.

7.

In published annual reports

A)

subdivisions within the stockholders’ equity section are routinely reported in detail.

B)

capital surplus is used in place of retained earnings.

C)

the individual sources of additional paid-in capital are often combined.

D)

retained earnings is often not shown separately.

8.

If stock is issued in exchange for noncash assets, the assets should be valued at the ____________________ of the consideration ___________________ or the assets ____________________, whichever is more clearly evident.

9.

Beckham Company has 1,000 shares of 6%, $100 par cumulative preferred stock outstanding at December 31, 2010. No dividends have been paid on this stock for 2009 or 2010. Dividends in arrears at December 31, 2010 total

A)

$0.

B)

$600.

C)

$6,000.

D)

$12,000.

10.

Renner Corporation’s December 31, 2010 balance sheet showed the following:

8% preferred stock, $20 par value, cumulative, 20,000 shares

authorized; 15,000 shares issued

$ 300,000

Common stock, $10 par value, 2,000,000 shares authorized;

1,950,000 shares issued, 1,930,000 shares outstanding

19,500,000

Paid-in capital in excess of par value – preferred stock

60,000

Paid-in capital in excess of par value – common stock

27,000,000

Retained earnings

7,650,000

Treasury stock (20,000 shares)

630,000

Renner’s total stockholders’ equity was

A)

$55,140,000.

B)

$46,860,000.

C)

$54,510,000.

D)

$53,880,000.