An advantage of the corporate form of business entity isa. that corporations are subject to more governmental regulations.b. double taxation.c. the ease of transfer of ownership.d. unlimited liability for stockholders.

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One of the main disadvantages of the corporate form isa. the charter.b. professional management.c. that a corporation must issue stock.d. double taxation.
Which of the following statements concerning taxation is accurate?a. Only the stockholders must pay taxes on corporate income.b. Corporations pay federal income taxes but not state income taxes.c. Corporations pay income taxes but their stockholders do not.d. Corporations pay federal and state income taxes.
The number of shares of stock that a corporation can issue as stated in its charter is referred to asa. arrears.b. outstanding.c. authorized.d. issued.
The number of shares remaining in the hands of shareholders after some stock has been reacquired is referred to as the sharesa. in arrears.b. outstanding.c. authorized.d. issued.
When no-par stock is issued,a. Common Stock is credited for a standard $10 value.b. Common Stock is credited for the full amount of the proceeds.c. Paid-In Capital in Excess of Par is credited for the full amount of the proceeds.d. Common Stock is credited for an assumed par value.
The journal entry to issue 1,000,000 shares of $5 par common stock for $9 per share on July 2 would bea.July 2 Cash 5,000,000 Paid-In Capital in Excess of Par—C/S 4,000,000 Common Stock 9,000,000b.July 2 Cash 9,000,000 Common Stock 5,000,000Paid-In Capital in Excess of Par 4,000,000c.July 2 Cash 9,000,000 Common Stock 9,000,000d.July 2 Cash 5,000,000 Common Stock 5,000,000
Cumulative preferred stockholders have the right to receivea. dividends in arrears before common stockholders are paid any dividends.b. a greater share of dividends than common stockholders.c. dividends in arrears after common stockholders are paid dividends.d. None of these choices are correct.
The effect of the declaration of a cash dividend on a company"s financial statements is toa. increase total assets and stockholders" equity.b. decrease stockholders" equity and to increase total liabilities.c. decrease total assets and stockholders" equity.d. increase total expenses and total liabilities.
Which of the following is the appropriate general journal entry to record the declaration of cash dividends?a.Paid-In CapitalCash Dividends Payableb.Retained EarningsCashc.Cash DividendsCash Dividends Payabled.Cash Dividends DistributableCash
Luke Enterprises has 300,000 shares of $20 par common stock outstanding. On January 19, Luke Enterprises declared a 3% stock dividend. The market price of the stock on January 19 was $28 per share. The journal entry to record the stock dividend would includea. a debit to Cash for $252,000.b. a debit to Stock Dividends Distributable for $252,000.c. a credit to Stock Dividends for $180,000.d. None of these choices are correct.
When a corporation completes a 2-for-1 stock split,a. only the par value per share is decreased.b. only the ownership interest of current stockholders is decreased.c. only the market price per share of the stock is decreased.d. both market price per share and par value per share are decreased.
Which of the following statements is true concerning stock splits?a. Each shareholder will own the same total par amount of stock before and after the split.b. Stock splits require journal entries to be recorded.c. The total number of shares outstanding has not changed after the stock split.d. None of these choices are correct.
A major objective of a stock split is toa. reduce the market price per share of the stock.b. increase the par value of the stock.c. increase the market price per share of the stock.d. reduce the number of shares of the stock.
A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 5% stock dividend on a date when the market price was $11 per share. What is the amount transferred from the retained earnings account to the paid-in capital accounts as a result of the stock dividend?a. $8,000b. $22,000c. $16,000d. None of these choices are correct.
A corporation may reacquire (purchase) its own stock for the following reasons excepta. to reissue as bonuses to employees.b. to support the market price of the stock.c. to provide shares for resale to employees.d. None of these choices are correct.
The journal entry to record the sale of treasury stock might includea. a credit to Treasury Stock.b. a debit to Paid-In Capital from Sale of Treasury Stock.c. a credit to Paid-In Capital from Sale of Treasury Stock.d. All of these choices are correct.
he purchase and resale of treasury stock is normally recorded using thea. indirect method.b. cost method.c. direct method.d. equity method.
Treasury stock that was purchased for $2,500 is sold for $3,000. As a result of these two transactions combined,a. stockholders" equity will be increased by $500.b. income will be increased by $500.c. stockholders" equity will not change, because the amount of authorized stock has not changed.d. stockholders" equity will be increased by $3,000.
All of the following are normally found in a corporation"s Stockholders" Equity section excepta. Dividends Payable.b. Common Stock.c. Retained Earnings.d. Paid-In Capital in Excess of Par.
A restriction/appropriation of retained earningsa. decreases total retained earnings.b. decreases total assets.c. does not change the balance of Retained Earnings.d. increases total retained earnings.

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A statement of stockholders" equity is normally prepared whena. there is a purchase of treasury stock.b. there is a change in stock accounts.c. there is a change in paid-in capital accounts.d. All of these choices are correct.
What is the total stockholders" equity based on the following account balances? Common Stock $100,000Paid-In Capital in Excess of Par 500,000Retained Earnings 190,000Treasury Stock 40,000a. $830,000b. $750,000c. $790,000d. $600,000
Corporations have a separate legal existence, transferable units of stock, unlimited life, and limited stockholders" liability

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