ACCT 2001 Final Exam with precise detailed || || || || || || ||
solutions
Generally accepted accounting principles are primarily formulated by: - ✔✔The Financial
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Accounting Standards Board || ||
Retained Earnings Formula - ✔✔(Beginning Retained Earnings + Total Revenues) - Total
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Expenses
Which of the following is a false statement regarding partnerships? - ✔✔The accounting records
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for the partnership should be maintained separately from the accounting records of the partners
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Which of these is not a major advantage of a corporation? - ✔✔Government regulations
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A major disadvantage of a corporation is: - ✔✔additional taxes
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Preferred stock may have priority over common stock EXCEPT in: - ✔✔voting
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Entries for cash dividends are required on the: - ✔✔declaration date and payment date
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Which of these statements about stock dividends is true? - ✔✔A stock dividend has no effect on
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total stockholders' equity
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In the stockholders' equity section of the balance sheet, common stock: - ✔✔is part of paid-in
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capital
In the stockholders' equity section of the balance sheet, treasury stock is deducted from: -
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✔✔total paid-in capital and retained earnings
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, The return on common stockholders' equity is usually increased by all of the following, except:
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(a)an increase in the return on assets ratio.
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(b)an increase in the use of debt financing.
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(c)an increase in the company's stock price.
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(d)an increase in the company's net income. - ✔✔c. an increase in the company's stock price
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Thomas is nearing retirement and would like to invest in a stock that will provide a good steady
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income. Thomas should choose a stock with a:
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(a)high current ratio. || ||
(b)high dividend payout. || ||
(c)high earnings per share. || || ||
(d)high price-earnings ratio. - ✔✔b. high dividend payout
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If everything else is held constant, earnings per share is increased by:
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(a)the payment of a cash dividend to common shareholders.
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(b)the payment of a cash dividend to preferred shareholders.
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(c)the issuance of new shares of common stock.
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(d)the purchase of treasury stock. - ✔✔.d. the purchase of treasury stock
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A credit decreases the balance of which types of accounts? - ✔✔Expenses and Assets
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(AED, LRC) ||
Cash dividend's paid to the stockholder will: - ✔✔have no effect on stockholders' equity
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solutions
Generally accepted accounting principles are primarily formulated by: - ✔✔The Financial
|| || || || || || || || || || ||
Accounting Standards Board || ||
Retained Earnings Formula - ✔✔(Beginning Retained Earnings + Total Revenues) - Total
|| || || || || || || || || || || ||
Expenses
Which of the following is a false statement regarding partnerships? - ✔✔The accounting records
|| || || || || || || || || || || || || ||
for the partnership should be maintained separately from the accounting records of the partners
|| || || || || || || || || || || || ||
Which of these is not a major advantage of a corporation? - ✔✔Government regulations
|| || || || || || || || || || || || ||
A major disadvantage of a corporation is: - ✔✔additional taxes
|| || || || || || || || ||
Preferred stock may have priority over common stock EXCEPT in: - ✔✔voting
|| || || || || || || || || || ||
Entries for cash dividends are required on the: - ✔✔declaration date and payment date
|| || || || || || || || || || || || ||
Which of these statements about stock dividends is true? - ✔✔A stock dividend has no effect on
|| || || || || || || || || || || || || || || || ||
total stockholders' equity
|| ||
In the stockholders' equity section of the balance sheet, common stock: - ✔✔is part of paid-in
|| || || || || || || || || || || || || || || ||
capital
In the stockholders' equity section of the balance sheet, treasury stock is deducted from: -
|| || || || || || || || || || || || || || ||
✔✔total paid-in capital and retained earnings
|| || || || ||
, The return on common stockholders' equity is usually increased by all of the following, except:
|| || || || || || || || || || || || || ||
(a)an increase in the return on assets ratio.
|| || || || || || ||
(b)an increase in the use of debt financing.
|| || || || || || ||
(c)an increase in the company's stock price.
|| || || || || ||
(d)an increase in the company's net income. - ✔✔c. an increase in the company's stock price
|| || || || || || || || || || || || || || ||
Thomas is nearing retirement and would like to invest in a stock that will provide a good steady
|| || || || || || || || || || || || || || || || || ||
income. Thomas should choose a stock with a:
|| || || || || || ||
(a)high current ratio. || ||
(b)high dividend payout. || ||
(c)high earnings per share. || || ||
(d)high price-earnings ratio. - ✔✔b. high dividend payout
|| || || || || || ||
If everything else is held constant, earnings per share is increased by:
|| || || || || || || || || || ||
(a)the payment of a cash dividend to common shareholders.
|| || || || || || || ||
(b)the payment of a cash dividend to preferred shareholders.
|| || || || || || || ||
(c)the issuance of new shares of common stock.
|| || || || || || ||
(d)the purchase of treasury stock. - ✔✔.d. the purchase of treasury stock
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A credit decreases the balance of which types of accounts? - ✔✔Expenses and Assets
|| || || || || || || || || || || || ||
(AED, LRC) ||
Cash dividend's paid to the stockholder will: - ✔✔have no effect on stockholders' equity
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