GOALS ACHIEVEMENT

Select the appropriate response.

The feature of limited liability means that stockholders can never lose more than the par value of the stock in which they have invested.

true   or   false

Which of the following features would be associated with common stock?

preemptive rights   or   cumulative

Which of the following types of stock is accounted for similar to par-value stock?

no-par   or   stated-value

Total paid-in capital equals the par value of capital stock plus:

paid-in capital in excess of par value   or   retained earnings

For a cash dividend, stockholders' equity would be reduced on the:

date of declaration   or   date of payment

In the event dividends are paid to only one class of stock, which class is ordinarily paid?

preferred stock   or   common stock

Dividends that have not been paid on cumulative preferred stock are said to be:

in arrears   or   forgiven

If a corporation has dividends in arrears on preferred stock for two years ($5,000 per year), and declares $20,000 of dividends during the current (third) year, how much will be paid to the common shareholders?

$5,000   or   $10,000

Treasury stock is stock of one corporation that is owned by another corporation.

true   or   false

Treasury stock should be reported as:

a reduction of stockholders' equity   or   an asset

The reissuance of treasury stock would never result in a credit to:

Gain on Sale   or    Paid-in Capital

The accounting for a stock split requires the recording of a journal entry.

true   or   false

A small stock dividend (one that is less than 20-25%) should be accounted for based on:

par value   or   fair value

Stock dividends are reported on the statement of retained earnings.

true   or   false

In preparing the stockholders' equity section (and related footnotes), how much detail is required?

limited   or   significant

In lieu of the Statement of Retained Earnings, many companies will prepare an expanded Statement of Stockholders' Equity.

true   or   false