Acc 207 Week 3 Quiz

uNIVERSITY OF dELAWARE
ACCT 207 PRACTICE EXAM III

MICHAEL VAN LEER

1.
The incorporation of companies in the U.S. is controlled by:
A)
state governments.
B)
local governments.
C)
the Federal government.
D)
the courts.

2.
Stockholders' equity frequently includes which of the following:
A)
the present value of future dividends to be paid.
B)
the total par value of common stock.
C)
retained earnings.
D)
B and C, but not A.

3.
A corporate charter specifies that the company may sell up to 20 million shares of stock. The company sells 12 million shares to investors and later buys back 3 million shares. Of the 3 million shares bought back, the company cancels 2 million and holds 1 million. The number of authorized shares after these
In recording the transaction, it would:
A)
debit Cash for $20,000 and credit Common Stock for $20,000.
B)
debit Cash for $15 million and credit Common Stock for $15 million.
C)
debit Cash for $15 million, credit Common Stock for $20,000 and credit Additional Paid-in Capital for $14,980,000.
D)
debit Cash for $20,000, debit Capital Receivable for $14,980,000, credit Common Stock for $20,000 and credit Additional Paid-in Capital for $14,980,000.

5.
Treasury stock:
A)
does not appear on the balance sheet.
B)
is recorded as a contra-equity account.
C)
is recorded as an asset account.
D)
is recorded as paid-in capital.

6.
Stockholders' equity is:
A)
the amount the company received for all stock when issued plus the amount of retained earnings minus treasury stock.
B)
the amount the company received for all stock authorized plus the amount of retained earnings and treasury stock.
C)
the par value the company received for all stock issued plus the amount of retained earnings minus treasury stock.
D)
the amount the company received for all stock when issued minus the amount of retained earnings and treasury stock.

7.
Which of the following statements about dividends is not
D)
Dividends are declared at the discretion of the board of directors.

8.
The declaration date for a dividend is the date on which the company:
A)
debits Dividends Declared and credits Dividends Payable for the amount of the dividend.
B)
debits Dividend Expense and credits Cash for the dividend amount.
C)
debits Dividends Payable and credits Cash for the dividend amount.
D)
establishes who will receive the dividend payment.

9.
The date of record for a dividend is the date on which the company:
A)
debits Dividends Declared and credits Dividends Payable for the amount of the dividend.
B)
debits Dividend Expense and credits Cash for the dividend amount.
C)
debits Dividends Payable and credits Cash for the dividend amount.
D)
establishes who will receive the dividend payment.

10.
The payment date for a dividend is the date on which the company:
A)
debits Dividends Declared and credits Dividends Payable for the amount of the dividend.
B)
debits Dividend Expense and credits Cash for the dividend amount.
C)
debits Dividends Payable and credits Cash for the dividend amount.
D)
establishes who will receive the dividend payment.

11.
Cash dividends can be paid only when: