Accounting 212 Exam 1 {chapters |\ |\ |\ |\ |\
13,14,16,17} multiple choice questions |\ |\ |\ |\
with answers |\
Which are following is NOT a major advantage of a corporate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
form of organization?
|\ |\
a. seperate legal existence
|\ |\ |\
b. continuous life
|\ |\
c. government regulations
|\ |\
d. transferable ownership rights - CORRECT ANSWERS ✔✔c
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A major disadvantage of corporation is:
|\ |\ |\ |\ |\
a. limited liability of stockholders
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b. additional taxes
|\ |\
c. transferable ownership rights
|\ |\ |\
d. seperate legal existence - CORRECT ANSWERS ✔✔b
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Costs incurred in the formation of a corporation:
|\ |\ |\ |\ |\ |\ |\
a. do not include legal fees
|\ |\ |\ |\ |\
b. are expensed as incurred
|\ |\ |\ |\
c. are recorded as an asset.
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d. provide future benefits whose amounts and timing are easily
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determined. - CORRECT ANSWERS ✔✔b |\ |\ |\ |\
,Which of the following statements is false?
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a. ownership of common stock gives the owner a voting right.
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b. the stockholders' equity section begins with paid in capital
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c. the authorization of capital stock does not result in a formal
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accounting entry. |\ |\
d. legal capital per share applies to par value stock but not to no-
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par value stock. - CORRECT ANSWERS ✔✔d
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Total stockholders' equity (in the abscense of treasury stock)
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equals:
a. total paid in capital + retained earnings
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b. paid in capital + capital stock + retained earnings
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c. capital stock + additional paid in capital - retained earnings
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d. common stock + retained earnings - CORRECT ANSWERS ✔✔a
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The account Retained Earnings is:
|\ |\ |\ |\
a. a subdivision of paid-in capital
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b. net income retained in the corporation
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c. reported as an expense in the income statement
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d. closed to capital stock - CORRECT ANSWERS ✔✔b
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A-Team coporation issued 1,000 shares of $5 par value stock for
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land. The stock is actively traded at $9 per share. The land was
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advertised for sale at $10,500. The land should be recorded at:
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a. $4,000
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b. $5,000
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, c. $9,000
|\
d. $10,500 - CORRECT ANSWERS ✔✔c
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ABC corporation issues 1,000 shares of $10 par value common
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stock at $12 per share. In recording the transaction, credits are
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made to: |\
a. Common Stock $10,000 and Paid-In Capital in Excess of Stated
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Value $2000
|\ |\
b. Common Stock $12,000
|\ |\ |\
c. Common stock $10,000 and Paid-in Capital in excess of par
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$2,000
d. Common stock $10,000 and Retained earnings $2,000 -
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CORRECT ANSWERS ✔✔c |\ |\
Treasury stock may be purchased: |\ |\ |\ |\
a. to reissue the shares to officers and employees under bonus
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and stock compensation plans.
|\ |\ |\
b. to signal to the stock market that management believes the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock is underpriced. |\ |\
c. to have additional shares available for use in the acquisition of
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other companies.
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d. more than one of the above. - CORRECT ANSWERS ✔✔d
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XYZ, Inc. sells 100 shares of $5 par value treasury stock at $13
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per share. If the cost of acquiring the shares was $10 per share,
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the entry for the sale should include credits to:
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13,14,16,17} multiple choice questions |\ |\ |\ |\
with answers |\
Which are following is NOT a major advantage of a corporate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
form of organization?
|\ |\
a. seperate legal existence
|\ |\ |\
b. continuous life
|\ |\
c. government regulations
|\ |\
d. transferable ownership rights - CORRECT ANSWERS ✔✔c
|\ |\ |\ |\ |\ |\ |\
A major disadvantage of corporation is:
|\ |\ |\ |\ |\
a. limited liability of stockholders
|\ |\ |\ |\
b. additional taxes
|\ |\
c. transferable ownership rights
|\ |\ |\
d. seperate legal existence - CORRECT ANSWERS ✔✔b
|\ |\ |\ |\ |\ |\ |\
Costs incurred in the formation of a corporation:
|\ |\ |\ |\ |\ |\ |\
a. do not include legal fees
|\ |\ |\ |\ |\
b. are expensed as incurred
|\ |\ |\ |\
c. are recorded as an asset.
|\ |\ |\ |\ |\
d. provide future benefits whose amounts and timing are easily
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
determined. - CORRECT ANSWERS ✔✔b |\ |\ |\ |\
,Which of the following statements is false?
|\ |\ |\ |\ |\ |\
a. ownership of common stock gives the owner a voting right.
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
b. the stockholders' equity section begins with paid in capital
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
c. the authorization of capital stock does not result in a formal
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
accounting entry. |\ |\
d. legal capital per share applies to par value stock but not to no-
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
par value stock. - CORRECT ANSWERS ✔✔d
|\ |\ |\ |\ |\ |\
Total stockholders' equity (in the abscense of treasury stock)
|\ |\ |\ |\ |\ |\ |\ |\ |\
equals:
a. total paid in capital + retained earnings
|\ |\ |\ |\ |\ |\ |\
b. paid in capital + capital stock + retained earnings
|\ |\ |\ |\ |\ |\ |\ |\ |\
c. capital stock + additional paid in capital - retained earnings
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
d. common stock + retained earnings - CORRECT ANSWERS ✔✔a
|\ |\ |\ |\ |\ |\ |\ |\ |\
The account Retained Earnings is:
|\ |\ |\ |\
a. a subdivision of paid-in capital
|\ |\ |\ |\ |\
b. net income retained in the corporation
|\ |\ |\ |\ |\ |\
c. reported as an expense in the income statement
|\ |\ |\ |\ |\ |\ |\ |\
d. closed to capital stock - CORRECT ANSWERS ✔✔b
|\ |\ |\ |\ |\ |\ |\ |\
A-Team coporation issued 1,000 shares of $5 par value stock for
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
land. The stock is actively traded at $9 per share. The land was
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
advertised for sale at $10,500. The land should be recorded at:
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
a. $4,000
|\
b. $5,000
|\
, c. $9,000
|\
d. $10,500 - CORRECT ANSWERS ✔✔c
|\ |\ |\ |\ |\
ABC corporation issues 1,000 shares of $10 par value common
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock at $12 per share. In recording the transaction, credits are
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
made to: |\
a. Common Stock $10,000 and Paid-In Capital in Excess of Stated
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Value $2000
|\ |\
b. Common Stock $12,000
|\ |\ |\
c. Common stock $10,000 and Paid-in Capital in excess of par
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
$2,000
d. Common stock $10,000 and Retained earnings $2,000 -
|\ |\ |\ |\ |\ |\ |\ |\ |\
CORRECT ANSWERS ✔✔c |\ |\
Treasury stock may be purchased: |\ |\ |\ |\
a. to reissue the shares to officers and employees under bonus
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and stock compensation plans.
|\ |\ |\
b. to signal to the stock market that management believes the
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stock is underpriced. |\ |\
c. to have additional shares available for use in the acquisition of
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
other companies.
|\ |\
d. more than one of the above. - CORRECT ANSWERS ✔✔d
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
XYZ, Inc. sells 100 shares of $5 par value treasury stock at $13
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
per share. If the cost of acquiring the shares was $10 per share,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
the entry for the sale should include credits to:
|\ |\ |\ |\ |\ |\ |\ |\
