ACCT 201A Exam 3 Study Guide
Questions All Solved 2026-2027 SET.
Common shareholders do not have the rights to: - Answer To participate in the day-to-day
operations
The advantages of a corporation compared to a sole proprietorship or partnership include: -
Answer Limited Liability
The disadvantages of a corporation compared to a sole proprietorship or partnership include: -
Answer Double Taxation
The correct order from the largest number of shares to the smallest number of shares is: -
Answer Authorized, Issued, and Outstanding
Petite Fashions issued 500,000 of its 2 million shares of authorized common stock. At the end of
the accounting period, 450,000 shares are outstanding. How many shares of treasury stock does
Petite Fashions have? - Answer 50,000 shares.
If a company issues par-value stock, the amount credited to common stock will be: - Answer
The par value per share X the number of shares issued
A company issues 100,000 shares of $1 par value common stock for $17 per share. To record
this transaction, the company would credit Common Stock for: - Answer $100,000
A company issues 100,000 shares of $1 par value common stock for $17 per share. To record
this transaction, the company would credit Additional Paid-in Capital for: - Answer $1,600,000
How does the stockholders' equity section in the balance sheet differ from the statement of
stockholders' equity? - Answer The stockholder's equity section shows balances at a point in
time, whereas the statement of stockholders' equity shows activity over a period of time
Both cash dividends and stock dividends - Answer reduce retained earnings
Suppose a company declares a dividend of $0.50 per share. At the time of declaration, the
company has 100,000 shares issued and 90,000 shares outstanding. On the declaration date,
Dividends would be recorded for - Answer $45,000.
We credit Dividends Payable on - Answer declaration date
, Suppose a company purchases 2,000 shares of its own $1 par value common stock for $16 per
share. Which of the following is recorded at the time of the purchase? - Answer Debit Treasury
Stock for $32,000.
Preferred Stock - Answer can have features of both liabilities and stockholders' equity
When treasury stock is resold, total stockholders' equity: - Answer increases
A stock dividend occurs when: - Answer a company distributes to shareholders additional
shares of its own stock
Primary reason for declaring a Stock Split - Answer Lower trading price of stock into a more
acceptable range
Effect of a stock dividend on total stockholders' equity? - Answer Stockholders' equity does
not change.
Salaries expense for the year equals $240,000. Salaries payable at the beginning of the year
were $25,000, and at the end of the year were $15,000. Calculate cash paid for salaries during
the year. - Answer $250,000
The balance of cash at the beginning of the year was $120,000, and at the end of the year was
$140,000. Assuming operating cash flows equal $90,000 and investing cash flows equal
$(40,000), calculate financing cash flows for the year. - Answer $(30,000)
Example of cash outflow from a financing activity: - Answer payment of cash dividends
calculate net cash flows from investing activities. - Answer $(15,000); Subtract total outflows
from total inflows
Calculate cash flow from operating activites: - Answer $145,000; Net income +/- changes in
assets and liabilities + noncash expenses
An example of a noncash activity - Answer Purchase of land by issuing common stock to seller
Smith Company's sales revenues for the year are $200,000 and its accounts receivable balance
increased by $10,000. How much is "cash collected from customers"? - Answer $190,000
Questions All Solved 2026-2027 SET.
Common shareholders do not have the rights to: - Answer To participate in the day-to-day
operations
The advantages of a corporation compared to a sole proprietorship or partnership include: -
Answer Limited Liability
The disadvantages of a corporation compared to a sole proprietorship or partnership include: -
Answer Double Taxation
The correct order from the largest number of shares to the smallest number of shares is: -
Answer Authorized, Issued, and Outstanding
Petite Fashions issued 500,000 of its 2 million shares of authorized common stock. At the end of
the accounting period, 450,000 shares are outstanding. How many shares of treasury stock does
Petite Fashions have? - Answer 50,000 shares.
If a company issues par-value stock, the amount credited to common stock will be: - Answer
The par value per share X the number of shares issued
A company issues 100,000 shares of $1 par value common stock for $17 per share. To record
this transaction, the company would credit Common Stock for: - Answer $100,000
A company issues 100,000 shares of $1 par value common stock for $17 per share. To record
this transaction, the company would credit Additional Paid-in Capital for: - Answer $1,600,000
How does the stockholders' equity section in the balance sheet differ from the statement of
stockholders' equity? - Answer The stockholder's equity section shows balances at a point in
time, whereas the statement of stockholders' equity shows activity over a period of time
Both cash dividends and stock dividends - Answer reduce retained earnings
Suppose a company declares a dividend of $0.50 per share. At the time of declaration, the
company has 100,000 shares issued and 90,000 shares outstanding. On the declaration date,
Dividends would be recorded for - Answer $45,000.
We credit Dividends Payable on - Answer declaration date
, Suppose a company purchases 2,000 shares of its own $1 par value common stock for $16 per
share. Which of the following is recorded at the time of the purchase? - Answer Debit Treasury
Stock for $32,000.
Preferred Stock - Answer can have features of both liabilities and stockholders' equity
When treasury stock is resold, total stockholders' equity: - Answer increases
A stock dividend occurs when: - Answer a company distributes to shareholders additional
shares of its own stock
Primary reason for declaring a Stock Split - Answer Lower trading price of stock into a more
acceptable range
Effect of a stock dividend on total stockholders' equity? - Answer Stockholders' equity does
not change.
Salaries expense for the year equals $240,000. Salaries payable at the beginning of the year
were $25,000, and at the end of the year were $15,000. Calculate cash paid for salaries during
the year. - Answer $250,000
The balance of cash at the beginning of the year was $120,000, and at the end of the year was
$140,000. Assuming operating cash flows equal $90,000 and investing cash flows equal
$(40,000), calculate financing cash flows for the year. - Answer $(30,000)
Example of cash outflow from a financing activity: - Answer payment of cash dividends
calculate net cash flows from investing activities. - Answer $(15,000); Subtract total outflows
from total inflows
Calculate cash flow from operating activites: - Answer $145,000; Net income +/- changes in
assets and liabilities + noncash expenses
An example of a noncash activity - Answer Purchase of land by issuing common stock to seller
Smith Company's sales revenues for the year are $200,000 and its accounts receivable balance
increased by $10,000. How much is "cash collected from customers"? - Answer $190,000
