Stockholders Equity Verified Exam Questions and Answers Latest
update 2026/2027
Question:
To start a corporation in the U.S., it is necessary to file an application in one of the states. The legal
document that the state approves is the
Answer:
articles of incorporation
Question:
One of the advantages of the corporation form of business as opposed to a partnership form is the ease
of transferring
Answer:
ownership
Question:
At a corporation, Assets minus Liabilities is
Answer:
stockholder's equity Shares of stock that have been issued and have not been reacquired by the issuing
corporation are called __________
Question:
shares.
Answer:
outstanding If a corporation has issued only one type of stock, it is __________
Question:
stock.
Answer:
common The type of stock that gets its dividend before the common stock gets its dividend is called
__________
Question:
stock.
Answer:
preferred The holders of __________
, Question:
stock elect the corporation's board of directors.
Answer:
common The par value of __________
Question:
stock usually has no economic significance.
Answer:
common The dividend on preferred stock is often expressed as a percentage. To calculate the annual
dividend on preferred stock, you multiply the percentage times the __________
Question:
of the preferred stock.
Answer:
par value If a corporation issues 10% Preferred Stock $100 Par on a day when the financial markets
demand 9%, this corporation's 10% Preferred Stock will sell for __________
Question:
than its par value.
Answer:
more
Question:
If a common stock does not have a par value or a stated value, the entire proceeds from issuing the
stock is credited to one account entitled __________
Answer:
common stock
Question:
Dividends appear as an expense on the corporation's income statement.
Answer:
false
Question:
If the board of directors does not declare the regular quarterly divided on its common stock, the
corporation's liabilities will include the omitted dividend.
Answer:
false The __________
update 2026/2027
Question:
To start a corporation in the U.S., it is necessary to file an application in one of the states. The legal
document that the state approves is the
Answer:
articles of incorporation
Question:
One of the advantages of the corporation form of business as opposed to a partnership form is the ease
of transferring
Answer:
ownership
Question:
At a corporation, Assets minus Liabilities is
Answer:
stockholder's equity Shares of stock that have been issued and have not been reacquired by the issuing
corporation are called __________
Question:
shares.
Answer:
outstanding If a corporation has issued only one type of stock, it is __________
Question:
stock.
Answer:
common The type of stock that gets its dividend before the common stock gets its dividend is called
__________
Question:
stock.
Answer:
preferred The holders of __________
, Question:
stock elect the corporation's board of directors.
Answer:
common The par value of __________
Question:
stock usually has no economic significance.
Answer:
common The dividend on preferred stock is often expressed as a percentage. To calculate the annual
dividend on preferred stock, you multiply the percentage times the __________
Question:
of the preferred stock.
Answer:
par value If a corporation issues 10% Preferred Stock $100 Par on a day when the financial markets
demand 9%, this corporation's 10% Preferred Stock will sell for __________
Question:
than its par value.
Answer:
more
Question:
If a common stock does not have a par value or a stated value, the entire proceeds from issuing the
stock is credited to one account entitled __________
Answer:
common stock
Question:
Dividends appear as an expense on the corporation's income statement.
Answer:
false
Question:
If the board of directors does not declare the regular quarterly divided on its common stock, the
corporation's liabilities will include the omitted dividend.
Answer:
false The __________
