Sample Final Exam

Sample Final Exam - Fall 2009 Sample Final Exam MULTIPLE...

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Fall 2009 Sample Final Exam MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1)Limited liability of a corporation means that: 1) _______ A)a shareholders' potential loss is limited to their investment in the corporation. B)the corporation is not required to pay dividends. C)shareholders are not responsible for the decisions of management. D)the corporation is not required to earn net income. 2)The number of stocks outstanding is the same as the number of stocks: 2) _______ A)ready to be sold to shareholders. B)currently in the hands of the stockholders. C)issued to the shareholders. D)authorized by the board of directors. 3)Assets received in exchange for the issuance of stock should be recorded at: 3) _______ A)fair market value, as determined by a good-faith estimate from independent appraisers. B)historical cost. C)book value of the asset exchanged. D)historical cost less accumulated depreciation taken to date. 4)Golden Eagle Corporation issues 100 shares of $10 par value common stock for $50 per share. This transaction will include a credit to Common Stock for: 4) _______ A)$1,000 and a credit to Paid-in Capital for $4,000. B)$1,000 and a Gain on Issue of Common Stock for $4,000. C)$5,000. D)$1,000 and a credit to Retained Earnings for $4,000. 5)Treasury stock accounts for the difference between: 5) _______ A)issued shares and authorized shares. B)issued shares and preferred shares. C)authorized shares and outstanding shares. D)outstanding shares and issued shares. 6)The purchase of treasury stock: 6) _______ A)decreases assets and increases stockholders' equity. B)decreases assets and increases liabilities. C)decreases assets and decreases stockholders' equity. D)increases assets and decreases stockholders' equity. 7)A company should recognize a gain on treasury stock: 7) _______ A)when treasury stock is sold for less than the par value of the stock. B)when treasury stock is sold for more than the par value of the stock. C)when treasury stock is purchased for less than the par value of the stock. D)in none of the above situations. No gain is recognized on treasury stock transactions.
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8)The declaration of a cash dividend: 8) _______ A)increases liabilities and decreases stockholders' equity. B)increases liabilities and reduces assets. C)reduces liabilities and increases stockholders' equity. D)increases liabilities and increases stockholders' equity. 9)Dividends in arrears on cumulative preferred stock are: 9) _______ A)ignored on the financial statements. B)reported as a long-term liability on the balance sheet. C)reported as a current liability on the balance sheet. D)disclosed in notes to the financial statements. 10)Sabik Corporation has had 7,500 shares of 6%, $50 par value, cumulative
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This note was uploaded on 04/03/2012 for the course ACCT 23020 taught by Professor Dorff,p during the Spring '08 term at Kent State.

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Sample Final Exam - Fall 2009 Sample Final Exam MULTIPLE...

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