Mock Exam IITerm Text
Practice Exam: TEXT
PART A – Multiple Choice Questions
Please, place your answers here:
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1. On December 15, 2009, the board of directors of Cross Corporation declared a cash dividend, payable on January 8, 2010 of $.80 per share on the 2,000,000 common shares outstanding.
On December 15, 2009, Cross Corporation should
A. not prepare a journal entry because the event had no effect on the corporation's financial position until 2010.
B. decrease retained earnings $1.6 million and increase expenses $1.6 million.
C. decrease retained earnings $1.6 million and increase liabilities by $1.6 million.
D. decrease cash $1.6 million and decrease retained earnings $1.6 million.
2. The declaration and payment of a cash dividend
A. reduces retained earnings and increases liabilities by the amount of the dividend.
B. reduces retained earnings and increases contributed capital by the same amount.
C. reduces assets and increases liabilities by the amount of the dividend.
D. reduces both assets and retained earnings by the amount of the dividend.
30005 – Accounting and Financial Statement Analysis
1
3.
Which of the following entries would be recorded when a company reissues 1,000 shares of treasury stock for $40 per share when they were repurchased at a cost of $44 per share and have a $1 par value?
A. Option A
B. Option B
C. Option C
D. Option D
4.
Which of the following journal entries is correct when common stock is initially issued for cash at a price in excess of the stock's stated value?
A.
B.
C.
D.
5.
Piano Company owns 55% of the voting common stock shares of Keys Corporation. Which of the following is true?
A. The investment would be accounted for using the equity method.
B. The investment would be accounted for by consolidation.
C. The investment would be accounted for under the market value method.
D. The investment would be accounted for under the amortized cost method.
30005 – Accounting and Financial Statement
PART A – Multiple Choice Questions
Please, place your answers here:
1
11
2
12
3
13
4
14
5
15
6
7
8
9
10
1. On December 15, 2009, the board of directors of Cross Corporation declared a cash dividend, payable on January 8, 2010 of $.80 per share on the 2,000,000 common shares outstanding.
On December 15, 2009, Cross Corporation should
A. not prepare a journal entry because the event had no effect on the corporation's financial position until 2010.
B. decrease retained earnings $1.6 million and increase expenses $1.6 million.
C. decrease retained earnings $1.6 million and increase liabilities by $1.6 million.
D. decrease cash $1.6 million and decrease retained earnings $1.6 million.
2. The declaration and payment of a cash dividend
A. reduces retained earnings and increases liabilities by the amount of the dividend.
B. reduces retained earnings and increases contributed capital by the same amount.
C. reduces assets and increases liabilities by the amount of the dividend.
D. reduces both assets and retained earnings by the amount of the dividend.
30005 – Accounting and Financial Statement Analysis
1
3.
Which of the following entries would be recorded when a company reissues 1,000 shares of treasury stock for $40 per share when they were repurchased at a cost of $44 per share and have a $1 par value?
A. Option A
B. Option B
C. Option C
D. Option D
4.
Which of the following journal entries is correct when common stock is initially issued for cash at a price in excess of the stock's stated value?
A.
B.
C.
D.
5.
Piano Company owns 55% of the voting common stock shares of Keys Corporation. Which of the following is true?
A. The investment would be accounted for using the equity method.
B. The investment would be accounted for by consolidation.
C. The investment would be accounted for under the market value method.
D. The investment would be accounted for under the amortized cost method.
30005 – Accounting and Financial Statement