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Questions and Answers
What is a primary source of shareholders' equity?
What is a primary source of shareholders' equity?
- External debt
- Income retained by the corporation (correct)
- Decreased earnings from the previous year
- Selling company assets
How is shareholders' equity generally classified?
How is shareholders' equity generally classified?
- Contributed capital and appropriated capital
- Issued capital and outstanding capital
- Appropriated capital and retained earnings (correct)
- Retained earnings and unappropriated capital
What is the least appropriate basis for recording a transaction when a corporation issues its capital stock in payment for services?
What is the least appropriate basis for recording a transaction when a corporation issues its capital stock in payment for services?
- Total assets of the corporation (correct)
- Market value of the services received
- Par value of the shares issued
- Market value of the shares issued
When are direct costs incurred to sell stock accounted for as an expense?
When are direct costs incurred to sell stock accounted for as an expense?
What will create a 'secret reserve' in accounting?
What will create a 'secret reserve' in accounting?
What is stock with a fixed per-share amount printed on each stock certificate called?
What is stock with a fixed per-share amount printed on each stock certificate called?
The pre-emptive right of ordinary shareholders is the right to:
The pre-emptive right of ordinary shareholders is the right to:
The pre-emptive right enables a stockholder to:
The pre-emptive right enables a stockholder to:
In a corporate form of business organization, legal capital is best defined as:
In a corporate form of business organization, legal capital is best defined as:
Which one of these has the residual interest in a corporation?
Which one of these has the residual interest in a corporation?
Shareholders of a business enterprise are said to be the residual owners. The term residual owner means that shareholders:
Shareholders of a business enterprise are said to be the residual owners. The term residual owner means that shareholders:
Which of the following is not a characteristic of preference shareholders?
Which of the following is not a characteristic of preference shareholders?
