Chapter 13 Quiz

Chapter 13 Quiz - ACC102 C13 Student Practice Quiz ALL...

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Practice Quiz ALL OBJECTIVES BUT not 7 calculating book value True-False 1. TF The conversion of preferred shares of stock into common shares would be disclosed in the statement of stockholders’ equity. 2. TF A stock dividend will increase total stockholders’ equity. 3. TF Common Stock Distributable is classified as a current liability. 4. TF The heading of a statement of stockholders’ equity could correctly contain the line “December 31, 20xx.” 5. TF In the calculation of book value per share of common stock, the call value of preferred stock is relevant, but any dividends in arrears are not . (do not do Objective 7 so not needed) 6. TF When a large stock dividend is declared, the par or stated value of the stock should be transferred from retained earnings to contributed capital. 7. TF A company with a complex capital structure must present two earnings per share figures. Multiple Choice 8. In accounting, a deficit is defined as a a. net loss. b. credit balance in retained earnings. c. negative balance in cash. d. restriction on retained earnings. e. negative balance in retained earnings. 9. Which of the following would not be treated as an extraordinary item? a. Loss from earthquake destruction b. Loss on property taken over by a foreign government c. Loss on the sale of office equipment d. Loss resulting from a new law prohibiting a company’s product e. Gain from early retirement of debt 10. In 20x8, a company changes from the straight-line method of depreciation to the double-declining- balance method. Depreciation taken prior to the change was $4,000, but would have been $9,000 if the new method had been used all along. Ignoring taxes, what should be done to account for the change? The $5,000 difference should be a. included in the income statement for 20x8. b. amortized over the remaining life of the depreciable asset. c. ignored, though the new method should be applied beginning in 20x8. d. closed directly to retained earnings, thus bypassing the income statement. e. amortized over the years the depreciable asset has already been used. 11. A simple capital structure could include a. convertible bonds. b. nonconvertible preferred stock. c. stock options. d. convertible preferred stock. e. none of the above. 12. Which of the following statements is not true about a 5 percent stock dividend? a. The market value of the stock is needed to record the stock dividend. b.
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This note was uploaded on 04/25/2011 for the course ACC 101 taught by Professor Dasd during the Winter '08 term at DePaul.

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Chapter 13 Quiz - ACC102 C13 Student Practice Quiz ALL...

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