ACC 100 FINAL EXAM PRACTICE SOLUTION
2026 TESTED QUESTIONS WITH FULL
ANSWERS
◉ corporation. Answer: entity created by law that is separate and
distinct from its owners
◉ purpose and ownership. Answer: two common ways to classify
corporations
◉ advantages of corporation. Answer: separate legal existence,
limited liability of stockholders, transferable ownership rights,
ability to acquire capital, continuous life, corporation management-
professional managers
◉ disadvantages of corporation. Answer: corporation management-
separation of ownership and management, government regulations,
additional taxes
◉ par value stock. Answer: capital stock that has been assigned a
value per share in the corporate charter- may be any amount
selected by the corporation
,◉ no par value stock. Answer: capital stock that has not been
assigned a value per share in the corporate charter
◉ paid-in capital and retained earnings. Answer: Stockholders'
equity consists of:
◉ paid in capital. Answer: total amount of cash and other assets paid
in to the corporation by stockholders in exchange for common stock
◉ retained earnings. Answer: net income that a corporation retains
for future use
◉ dr cash cr common stock. Answer: journal entry for issuance of
common stock at par value
◉ dr cash cr common stock cr APIC. Answer: journal entry for
issuance of common stock at above par value
◉ cost method. Answer: investment in stock is recorded at cost, and
revenue is recognized only when cash dividends are received
◉ dr treasury stock cr cash. Answer: journal entry for purchasing
treasury stock (cost method= by price paid to reacquire the shares)
, ◉ reduces. Answer: treasury stock _____ stockholders' equity
◉ dividend. Answer: a distribution by a corporation to its
stockholders on a pro rata (proportional to ownership) basis
◉ pro rata. Answer: if you own 10% of the common shares, you will
receive 10% of the dividend
◉ dr cash dividends cr dividends payable. Answer: journal entry at
declaration date for cash dividends
◉ no entry. Answer: journal entry at the record date of cash
dividends
◉ dr dividends payable cr cash. Answer: journal entry at payment
date of cash dividends
◉ div in arrears + current year div. Answer: formula for total
preferred dividends
◉ stock dividend. Answer: a pro rata distribution of the
corporation's own stock to stockholders (dec in ret en and inc
2026 TESTED QUESTIONS WITH FULL
ANSWERS
◉ corporation. Answer: entity created by law that is separate and
distinct from its owners
◉ purpose and ownership. Answer: two common ways to classify
corporations
◉ advantages of corporation. Answer: separate legal existence,
limited liability of stockholders, transferable ownership rights,
ability to acquire capital, continuous life, corporation management-
professional managers
◉ disadvantages of corporation. Answer: corporation management-
separation of ownership and management, government regulations,
additional taxes
◉ par value stock. Answer: capital stock that has been assigned a
value per share in the corporate charter- may be any amount
selected by the corporation
,◉ no par value stock. Answer: capital stock that has not been
assigned a value per share in the corporate charter
◉ paid-in capital and retained earnings. Answer: Stockholders'
equity consists of:
◉ paid in capital. Answer: total amount of cash and other assets paid
in to the corporation by stockholders in exchange for common stock
◉ retained earnings. Answer: net income that a corporation retains
for future use
◉ dr cash cr common stock. Answer: journal entry for issuance of
common stock at par value
◉ dr cash cr common stock cr APIC. Answer: journal entry for
issuance of common stock at above par value
◉ cost method. Answer: investment in stock is recorded at cost, and
revenue is recognized only when cash dividends are received
◉ dr treasury stock cr cash. Answer: journal entry for purchasing
treasury stock (cost method= by price paid to reacquire the shares)
, ◉ reduces. Answer: treasury stock _____ stockholders' equity
◉ dividend. Answer: a distribution by a corporation to its
stockholders on a pro rata (proportional to ownership) basis
◉ pro rata. Answer: if you own 10% of the common shares, you will
receive 10% of the dividend
◉ dr cash dividends cr dividends payable. Answer: journal entry at
declaration date for cash dividends
◉ no entry. Answer: journal entry at the record date of cash
dividends
◉ dr dividends payable cr cash. Answer: journal entry at payment
date of cash dividends
◉ div in arrears + current year div. Answer: formula for total
preferred dividends
◉ stock dividend. Answer: a pro rata distribution of the
corporation's own stock to stockholders (dec in ret en and inc
