Stockholders Equity Verified Exam Questions and Answers Latest
update 2026/2027
Question:
Which of the following is true of dividends?
Answer:
Dividends are a distribution of cash, stock, or other assets to the stockholders.
Question:
A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock. Which of the
following would be included in the entry to record the declaration?
Answer:
Dividends would be debited for $5,000
Question:
On the ________, cash dividends become a liability of a corporation.
Answer:
declaration date
Question:
The effect on the accounting equation of declaring a dividend is
Answer:
increase liabilities, decrease equity
Question:
The effect on the accounting equation of paying a previously declared dividend is
Answer:
decrease assets and liabilities
Question:
Which of the following would be included in the entry to record the payment of a previously declared
dividend of $0.25 per share on 12,500 shares of common stock?
Answer:
Dividends Payable would be debited for $3,125.
, Question:
The effect on the accounting equation of issuing stock at higher than its par value is
Answer:
increase assets and equity
Question:
Outstanding stock refers to the ________.
Answer:
shares of stock that are held by the stockholders
Question:
The par value of stock is ________.
Answer:
the amount assigned by a company to a share of its stock
Question:
Paid-in capital consists of ________.
Answer:
amounts received from stockholders in exchange for stock
Question:
Which of the following number is the largest?
Answer:
authorized shares
Question:
Preferred stock is a stock ________.
Answer:
that gives its owners certain benefits over common stock
Question:
Which of the following is true of preferred stock?
Answer:
Preferred stockholders generally receive a fixed amount of dividends before common stockholders
receive a dividend.
update 2026/2027
Question:
Which of the following is true of dividends?
Answer:
Dividends are a distribution of cash, stock, or other assets to the stockholders.
Question:
A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock. Which of the
following would be included in the entry to record the declaration?
Answer:
Dividends would be debited for $5,000
Question:
On the ________, cash dividends become a liability of a corporation.
Answer:
declaration date
Question:
The effect on the accounting equation of declaring a dividend is
Answer:
increase liabilities, decrease equity
Question:
The effect on the accounting equation of paying a previously declared dividend is
Answer:
decrease assets and liabilities
Question:
Which of the following would be included in the entry to record the payment of a previously declared
dividend of $0.25 per share on 12,500 shares of common stock?
Answer:
Dividends Payable would be debited for $3,125.
, Question:
The effect on the accounting equation of issuing stock at higher than its par value is
Answer:
increase assets and equity
Question:
Outstanding stock refers to the ________.
Answer:
shares of stock that are held by the stockholders
Question:
The par value of stock is ________.
Answer:
the amount assigned by a company to a share of its stock
Question:
Paid-in capital consists of ________.
Answer:
amounts received from stockholders in exchange for stock
Question:
Which of the following number is the largest?
Answer:
authorized shares
Question:
Preferred stock is a stock ________.
Answer:
that gives its owners certain benefits over common stock
Question:
Which of the following is true of preferred stock?
Answer:
Preferred stockholders generally receive a fixed amount of dividends before common stockholders
receive a dividend.
