Stockholders' Equity(Quick Test #1)

1. An advantage of the corporate form of business is __________ liability for the stockholders.

2. The directors of a corporation are elected by the corporation’s __________.

3. The costs of forming a corporation are known as __________ costs.

4. The maximum number of shares that a corporation can issue is its __________ number of shares.

5. The difference in the number of issued shares of stock and the number of outstanding shares of stock is the number of shares of __________ stock.

6. If the shares of a corporation’s common stock have a very small amount (such as $0.10) assigned to each share, it is likely to be the share’s __________ value.

7. If a corporation has only one type of stock, it will be __________ stock.

8. The type of stock issued by some corporations that has a specified dividend rate and the owners generally do not participate in the growth of the corporation is __________ stock.

9. When a corporation declares a cash dividend, it credits the current liability account __________ __________.

10. The declaration of a cash dividend has the effect of reducing the section within stockholders’ equity known as __________ __________.

11. The section of stockholders’ equity which reports the amounts received by the corporation at the time its stock was issued has the heading __________-in or contributed capital.

12. The section of stockholders’ equity which reports the cumulative earnings minus the cumulative dividends declared is __________ __________.

13. A corporation’s own stock that has been repurchased by the corporation and has not been retired is known as __________ stock.

14. If a corporation fails to declare a regular dividend on its preferred stock with the __________ feature, it will have dividends in arrears.

15. If common stock is issued for assets other than cash, the transaction should be recorded at the fair __________ value of 1) the stock issued, or 2) the assets acquired, whichever is more clearly determinable.

16. A corporation cannot record a gain or loss on its income statement for transactions involving its own __________.

17. The preferred __________ requirement must be deducted from a corporation’s net income when computing the earnings per share.

18. An advantage of the corporation is the stockholders’ ease in __________ their ownership interest.

19. Additional paid-in capital includes amounts received in excess of the stock’s par or __________ value.

20. Preferred stockholders will receive their __________ before the common stockholders will receive theirs.

21. The cumulative amount of other __________ income is to be reported as a separate component of stockholders’ equity.

22. A disadvantage of the regular corporation (not an S-corporation) as a form of business involves income __________.

23. A stockholder will receive the same number of shares if a corporation has a 2-for-1 stock split or a __________% stock dividend.

24. A corporation whose stock is traded on a stock exchange is said to be __________ held.

25. What is the effect of a stock (not cash) dividend on the total amount of stockholders’ equity?

26. The declaration of a cash dividend will have the following effect on the normal balance of the Retained Earnings account.

27. The account Common Stock Dividend Distributable resulting from the declaration of a 10% stock (not cash) dividend is a __________.

28. What is the effect of a stock split on the total amount of stockholders’ equity?

29. A corporation will record a liability on the date a cash dividend is __________.

30. Stockholders’ or owner’s equity has this type of claim against assets.

31. Callable preferred stock is callable at the option of the __________.

32. The market value per share and the par value per share of stock will decrease when the corporation has a significant sized __________.

33. The election of a corporation’s directors is normally done by which stockholders?

34. The earnings per share calculation uses which number of common shares of stock for the accounting period?

35. A small stock dividend will transfer the __________ value of the new shares from retained earnings to paid-in capital.

36. Paid-in capital is also known as __________.

37. When a corporation acquires treasury stock, its number of shares of __________ stock will be reduced.

38. The sale of treasury stock for more than its cost will increase __________.

39. Cash dividends on most publicly traded shares of stock occur __________.

40. The name assigned to a negative balance in retained earnings is __________.