author "Catherine Mallory"tags ""folders "Accounting"description ""fileName "Acct 2302 Exam 1 (Ch. 13 & 14)"The prices of bringing a corporation into visibility, consisting of legal fees, promoter fees, and quantities paid to attain a charter are called:A. Minimum legal capital.B. Stock subscriptions.C. Organization Costs. D. Cumulative prices.E. Prepaid fees.C. Organization Costs.
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Buying stock in a corporation is attrenergetic to investors because:A. Stockholders are not liable for the corporation"s actions and also debts.B. Stock is conveniently moved.C. A corporation has limitless life.D. Shareholters are not agents of the corporation.E. All of the above.
A proxy is:A. An amount of assets characterized bby state law that stockholders should invest and also leave invested in a corporation.B. A legal record that offers a disignated agent of a stockholder the power to vote the stock.C. An arbitrary amount assigned to no-par stock by the corporation"s board of directors.D. The ideal of widespread stockholders to safeguard their proportionate interests in a corporation by having actually the initially opportunity to purchase extra shares of common stock issued by the corporation.E. A contactual commitment by an investor to purchase unissued shares of stock.
The board of directors of a corporation:A. May not likewise be executive officers of the corporation, due to the separate entity principle.B. Are responsible for day-to-day operations of the organization.C. Are elected the corporate registrar.D. Are responsible for and also have final authority for managing corpoprice tasks.E. Do not have actually the power to bind the corporation to contracts, due to absence of mutual company.
The total amount of stock that a corporation"s charter permits it to worry is described as:A. Issued stock.B. Perferred stock.C. Authorized stock.D. Outstanding stock.E. Common stock.
Par worth of a stock refers to the:A. Maximum selling price of the stock.B. Value assigned to a share of stock by the corporate charter.C. Dividend value of the stock.D. Market worth of the stock on the day of the financial statements.E. Issue price of the stock.
Stockholders" equity consists of:A. Premiums and also discounts.B. Retained income and cash.C. Long-term assets.D. Contributed resources and retained income.E. Contributed capital and also par worth.
A class of stock that does not have actually a par worth, and also can usuallybe issued at any price without creating a minimum legal captial deficiency, is called:A. No-par stock.B. Convertible stock.C. Noncumulative stock.D. Callable stock.E. Discounted stock.
Owners of preferred stock often execute not have:A. The right to sell their stock on the open up market.B. Preference to dividends.C. Voting legal rights.D. Preference to assets at liquidation.E. Ownership rights to assets of the corporation.
Preferred stock on which the ideal to obtain dividends it forfeited for any kind of year that the dividends are not claimed is referred to as:A. Callable desired stock.B. Participation wanted stock.C. Cumulative desired stock.D. Noncumulative prferred stock.E. Convertible desired stock.
A agency issued 7% preferred stock through a $100 par worth. This implies that:A. Preferred shareholders are entitbrought about 7% of the yearly income.B. Only 7% of the full contributed capital deserve to be preferred stock.C. The industry price per share will approximate $100 per share.D. The amount of the potential dividfinish is $7 per year per perferred share.E. Preferred shareholders have actually a guaranteed dividfinish.
Retained earnings:A. Generally consists of a company"s cumulative net earnings much less any net losses and also dividends claimed since its inception.B. Can just be appropriated by setting aside a cash fund.C. Recurrent an amount of cash obtainable to pay shareholders.D. Are never before readjusted for anything other than net earnings or dividends.E. All of the over.
A. Typically is composed of a company"s cumulative net revenue much less any net losses and dividends claimed since its inception.
Prior duration adjustments to financial statements deserve to outcome from:A. Changes in approximates.B. Extraordinary items.C. Discontinued operations.D. Changes in tax legislation.E. Using unacceptable accountancy ethics.
A premium on prevalent stock:A. Is the difference between par worth and worry price when the amount phelp is listed below par.B. Is the amount phelp in excess of par by purchasers of recently issued stock.C. Represents resources get on sale of stock.D. Is prohibited in a lot of claims.E. Represents profit from issuing stock.
The date a board of directors votes to pay a dividend is dubbed the:A. Date of document.B. Date of declaration.C. Date of payment.D. Date of stockholders" meeting.E. Liquidating date.
A corporation"s distribution of additional shares of its very own stock to its stockholders without the recipt of any type of payment in rerevolve is referred to as a:A. Stock subscription.B. Premium on stock.C. Treasury Stock.D. Discount on Stock.E. Stock dividfinish.
Corporations regularly buy ago their own stock:A. To stop a hostile take-over.B. To have shares available for a merger or acquisition.C. To have actually shares obtainable for employee compensation.D. To preserve industry value for the agency stock.E. All of the over.
Stock that was reacquired and is still held by the issuing corporation is called:A. Callable stock.B. Preferred stock.C. Treasury stock.D. Capital stock.E. Redeemed stock.
Treasury stock is classified as:A. A liablity account.B. An asset account.C. A revenue account.D. A contra equity account.E. A contra asset account.
The complying with data were reported by a corporation:Authorized shares: 20,000Issued Shares: 15,000Treasury Shares: 3,000The variety of impressive shares is:A. 12,000.B. 23,000.C. 20,000.D. 15,000.E. 17,000.
Sinking money bonds:A. Required the issuer to set aside assets to retire the bonds at maturity.B. Required equal payments of both primary and interemainder over the life of the bond worry.C. Decline in value over time.D. Are registered bonds.E. Are bearer bonds.
Bonds that have actually an option exercisable by the issuer to retire them at a proclaimed dollar amount before maturity are know as:A. Junk bonds.B. Serial bonds.C. Sinking fund bonds.D. Callable bonds.E. Convertible bonds.
A bond traded at 102 1/2 means that:A. The bond pays 2.5% interest.B. The bond traded at $1,025 per $1,000 bond.C. The industry rate of interest is 2.5%.D. The bond were retired at $1,025 each.E. The sector rate of interest is 2 1/2% over the contract price.
Secured bonds:A. Are backed by the issuer"s bank.B. Are the same as sinking fund bonds.C. Are subordinated to those of various other unsecured liabilities.D. Are referred to as debentures.E. Have certain assets of the issuing agency pledged as collateral.
An advantage of bond financing is:A. Bonds perform not affects owners" regulate.B. Interemainder on bonds is taxes deductible.C. Bonds ca boost rerevolve on equity.D. It allows firms to profession on the equity.E. All of the over.
A disbenefit of bonds is:A. Bonds call for payment of periodic interest.B. Bonds require payment of principal.C. Bonds can decrease rerotate on equity.D. Bond payments can be burdensome once earnings and cash flow are low.E. All of the above.
The party that has the ideal to exercise the call choice on callable bonds is(are):A. The bond issuer.B. The bondholders.C. The bond underwriter.D. The bond indenture.E. The bond trustee.
The contract rate of interest is likewise referred to as the:A. Nominal rate.B. Stated price.C. Coupon price.D. Each of A, B, and also C.E. Market price.
Bonds can be issued:A. At par.B. At a premium.C. At a discount.D. Between interemainder payment days.E. All of the above.
When a bond sells at a premium:A. The contract rate is over the industry price.B. The contract rate is equal to the industry rate.C. The contract price is listed below the industry rate.D. It indicates that the bond is a zero coupon bond.E. The bond pays no interest.
A bond sells at a discount when the:A. Contract rate is above the industry rate.B. Contract price is equal to the sector rate.C. Contract price is below the industry rate.D. Bond has a short-lived life.E. Bond pays interemainder just as soon as a year.
Amortizing a bond discount:A. Decreases interest expense each period.B. Increases the industry worth of the Bonds Payable.C. Allocates a component of the full discount to each interemainder duration.D. Increases cash flows from the bond.E. Decreases the Bond Payable account.
The Discount on Bond Payable account is:A. A liablility.B. An expense.C. A contra price.D. A contra equity.E. A contra liablility.
A discount on bonds payable:A. Decreases the complete bond interemainder cost.B. Is not enabled in many kind of says to defend creditors.C. Increases the Bond Payable account.D. Occurs as soon as a agency worries bonds via a contract price less than the industry price.E. Occurs as soon as a agency issues bonds through a contract price even more than the industry price.
A agency might not retire bonds by:A. Exercising a speak to choice.B. The holders converting them to stock.C. Purchasing the bonds on the open market.D. Paying them off at maturity.E. All of the above.
Bonds that provide the issuer and also choice of retiring them prior to they mature are:A. Serial bondsB. Sinking fund bonds.C. Registered bonds.D. Debentures.E. Callable bonds.
Bonds with a par worth of less than $1,000 are known as:A. Baby bonds.B. Unsecured bonds.C. Convertible bonds.D. Junk bonds.E. Callable bonds.
To provide defense to creditors and also to reduct interemainder price, 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 bond issuer and the bondholders, which identifies the civil liberties and duties of the parties, is called a(n):A. Mortgage contract.B. Mortgage.C. Debenture.D. Installment note.E. Bond indenture.
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A firm should repay the financial institution $10,000 cash in 3 years for a loan it gotten in right into. The lean is at 8% interemainder compounded yearly. The persent out worth variable 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.