author "Catherine Mallory"tags ""folders "Accounting"description ""fileName "Acct 2302 exam 1 (Ch. 13 & 14)"The prices of happen a corporation into existence, including legal fees, promoter fees, and quantities paid to achieve a charter space called:A. Minimum legitimate capital.B. Share subscriptions.C. Company Costs. D. Accumulation costs.E. Prepaid fees.C. Company Costs.

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Buying share in a corporation is attractive to investor because:A. Stockholders are not liable for the corporation"s actions and debts.B. Share is conveniently transferred.C. A copy, group has unlimited life.D. Shareholters space not agents that the corporation.E. Every one of the above.
A proxy is:A. An lot of assets characterized bby state law that stockholders must invest and also leave invested in a corporation.B. A legal record that gives a disignated agent of a stockholder the strength to poll the stock.C. An arbitrary quantity assigned come no-par share by the corporation"s board of directors.D. The appropriate of typical stockholders to protect their proportionate understanding in a corporation by having actually the an initial opportunity come purchase added shares of typical stock approve by the corporation.E. A contactual commitment through an investors to purchase unissued shares of stock.
The plank of director of a corporation:A. Might not additionally be executive police officers of the corporation, due to the separate entity principle.B. Space responsible because that day-to-day work of the business.C. Are elected the corporate registrar.D. Room responsible for and have final authority for managing corporate activities.E. Carry out not have the strength to bind the corporation to contracts, as result of lack of shared agency.
The full amount that stock that a corporation"s charter enables it to problem is referred to as:A. Authorize stock.B. Perferred stock.C. Authorized stock.D. Outstanding stock.E. Typical stock.
Par value of a stock describes the:A. Maximum marketing price the the stock.B. Worth assigned to a re-publishing of share by the that company charter.C. Dividend worth of the stock.D. Market value that the stock on the date of the gaue won statements.E. Problem price the the stock.
Stockholders" equity consists of:A. Premiums and also discounts.B. Kept earnings and cash.C. Irreversible assets.D. Added capital and retained earnings.E. Contributed capital and par value.
A class of stock that does not have actually a par value, and also can usuallybe approve at any type of price without creating a minimum legit captial deficiency, is called:A. No-par stock.B. Convertible stock.C. Noncumulative stock.D. Callable stock.E. Discounted stock.
Owners of desired stock frequently do no have:A. The appropriate to sell their share on the open up market.B. Preference to dividends.C. Vote rights.D. Preference to assets at liquidation.E. Ownership legal rights to legacy of the corporation.
Preferred stock on which the right to receive dividends the forfeited for any kind of year the the dividends space not asserted is described as:A. Callable desired stock.B. Participation preferred stock.C. Cumulative desired stock.D. Noncumulative prferred stock.E. Convertible wanted stock.
A agency issued 7% wanted stock with a $100 par value. This method that:A. Desired shareholders room entitled come 7% the the yearly income.B. Only 7% of the total contributed funding can be desired stock.C. The sector price every share will approximate $100 every share.D. The lot of the potential dividend is $7 every year every perferred share.E. Preferred shareholders have a guaranteed dividend.
Retained earnings:A. Generally is composed of a company"s accumulation net earnings less any type of net losses and dividends declared since its inception.B. Have the right to only be appropriated by setting aside a cash fund.C. Stand for an lot of cash obtainable to pay shareholders.D. Are never readjusted for anything other than net earnings or dividends.E. All of the above.
A. Generally is composed of a company"s cumulative net income less any net losses and dividends declared due to the fact that its inception.
Prior period adjustments to financial explanation can result from:A. Changes in estimates.B. Extraordinary items.C. Discontinued operations.D. Changes in taxation law.E. Using unacceptable audit principles.
A premium on common stock:A. Is the difference between par value and issue price as soon as the amount payment is below par.B. Is the amount paid in overfill of par through purchasers of freshly issued stock.C. Represents resources gain on revenue of stock.D. Is banned in many states.E. Represents profit from issuing stock.
The day a board of directors votes to pay a dividend is referred to as the:A. Day of record.B. Date of declaration.C. Date of payment.D. Day of stockholders" meeting.E. Liquidating date.
A corporation"s circulation of additional shares the its own stock come its stockholders there is no the recipt of any payment in return is referred to as a:A. Share subscription.B. Premium ~ above stock.C. Treasury Stock.D. Discount top top Stock.E. Stock dividend.
Corporations often buy back their own stock:A. To protect against a hostile take-over.B. To have actually shares available for a closing or acquisition.C. To have actually shares available for employee compensation.D. Come maintain market value because that the company stock.E. All of the above.
Stock that was reacquired and also is still hosted by the issuing corporation is called:A. Callable stock.B. Preferred stock.C. Treasury stock.D. Funding stock.E. Redeemed stock.
Treasury share is divide as:A. A liablity account.B. An legacy account.C. A revenue account.D. A contra equity account.E. A contra asset account.
The adhering to data were reported by a corporation:Authorized shares: 20,000Issued Shares: 15,000Treasury Shares: 3,000The variety of outstanding share is:A. 12,000.B. 23,000.C. 20,000.D. 15,000.E. 17,000.
Sinking fund bonds:A. Required the issuer to collection aside assets to retire the bonds in ~ maturity.B. Forced equal payment of both principal and interest end the life the the shortcut issue.C. Decrease in value over time.D. Are registered bonds.E. Room bearer bonds.
Bonds that have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity are understand as:A. Junk bonds.B. Serial bonds.C. Sinking money bonds.D. Callable bonds.E. Convertible bonds.
A link traded at 102 1/2 way that:A. The bond payment 2.5% interest.B. The link traded at $1,025 per $1,000 bond.C. The industry rate of attention is 2.5%.D. The bond were retired at $1,025 each.E. The market rate of attention is 2 1/2% above the contract rate.
Secured bonds:A. Space backed by the issuer"s bank.B. Space the very same as sinking money bonds.C. Space subordinated to those of various other unsecured liabilities.D. Are called debentures.E. Have particular assets the the issuing agency pledged together collateral.
An benefit of shortcut financing is:A. Bonds perform not affect owners" control.B. Attention on bonds is taxes deductible.C. Bonds can increase return ~ above equity.D. It permits firms to trade on the equity.E. Every one of the above.
A disadvantage of bonds is:A. Bonds call for payment of periodic interest.B. Bonds need payment of principal.C. Bonds deserve to decrease return on equity.D. Link payments have the right to be burdensome as soon as income and cash circulation are low.E. All of the above.
The party that has the right to exercise the call option top top callable bonds is(are):A. The link issuer.B. The bondholders.C. The bond underwriter.D. The bond indenture.E. The link trustee.
The contract rate of interest is also called the:A. Nominal rate.B. Proclaimed rate.C. Coupon rate.D. Every of A, B, and also C.E. Market rate.
Bonds have the right to be issued:A. In ~ par.B. In ~ a premium.C. In ~ a discount.D. In between interest payment dates.E. Every one of the above.
When a link sells at a premium:A. The contract rate is above the market rate.B. The contract rate is equal to the industry rate.C. The contract rate is listed below the market rate.D. It way that the bond is a zero coupon bond.E. The bond payment no interest.
A bond sells at a discount when the:A. Contract rate is over the sector rate.B. Contract rate is same to the sector rate.C. Contract price is below the market rate.D. Bond has a short-lived life.E. Bond pays attention only once a year.
Amortizing a bond discount:A. Reduce interest expense each period.B. Increases the market value that the bonds Payable.C. Allocates a component of the complete discount come each interest period.D. Boosts cash flows from the bond.E. Decreases the shortcut Payable account.
The Discount on link Payable account is:A. A liablility.B. One expense.C. A contra expense.D. A contra equity.E. A contra liablility.
A discount on bonds payable:A. To reduce the complete bond interest expense.B. Is not enabled in many states to defend creditors.C. Increases the shortcut Payable account.D. Occurs as soon as a agency issues bonds with a contract rate much less than the industry rate.E. Occurs once a company issues bonds with a contract rate more than the industry rate.
A company may no retire bond by:A. Exercising a call option.B. The holders convert them come stock.C. Purchase the bonds on the open market.D. Paying them off at maturity.E. All of the above.
Bonds that give the issuer and also option of retiring them prior to they mature are:A. Serial bondsB. Sinking money bonds.C. Registered bonds.D. Debentures.E. Callable bonds.
Bonds v a par value of less than $1,000 are known as:A. Infant bonds.B. Unsecured bonds.C. Convertible bonds.D. Junk bonds.E. Callable bonds.
To carry out security come creditors and also to reduct attention cost, bonds and notes payable can be secured by:A. Debentures.B. The FASB.C. Morgages.D. Equity.E. Safe deposit boxes.
The Contract between the shortcut issuer and also the bondholders, which identifies the rights and obligations that the parties, is called a(n):A. Mortgage contract.B. Mortgage.C. Debenture.D. Rate note.E. Shortcut indenture.

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A company must repay the financial institution $10,000 cash in 3 years for a loan it gone into into. The lean is in ~ 8% attention compounded annually. The persent value factor for 3 years at 8% is 0.7938. The percent value of the loan is:A. $10,000.B. $7,938.C. $12,400.D. $7,600.E. $9,200.