Name _______________________________________ ACG 302 Chapter 15 Quiz Spring 2012 1. A primary source of stockholders' equity is A) income retained by the corporation. B) appropriated retained earnings. C) contributions by stockholders. D) both income retained by the corporation and contributions by stockholders. 2. Direct costs incurred to sell stock such as underwriting costs should be accounted for as 1. a reduction of additional paid-in capital. 2. an expense of the period in which the stock is issued. 3. an intangible asset. A) 1 B) 2 C) 3 D) 1 or 3 3. The cumulative feature of preferred stock A) limits the amount of cumulative dividends to the par value of the preferred stock. B) requires that dividends not paid in any year must be made up in a later year before dividends are distributed to common shareholders. C) means that the shareholder can accumulate preferred stock until it is equal to the par value of common stock at which time it can be converted into common stock. D)
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