COB 202: Ch 11 EXAM QUESTIONS AND ANSWERS VERIFIED 100% CORRECT

COB 202: Ch 11 EXAM QUESTIONS AND ANSWERS VERIFIED 100% CORRECT which of the following statements are TRUE - ANSWER- the term withdrawals may be found in the financial statements of both proprietorship and partnerships partnerships do not have a R/E account because all earnings are distributed directly to each partner's capital account immediately the term withdrawal may appear in the financial statements of a - ANSWER- partnership proprietorship a partner's capital account will appear in which of the following financial statements - ANSWER- balance sheet Assume that Base Line Incorporated is authorized to issue 50,000 shares of $15 stated value common stock. On 1/1, Y1, Base Line issued 10,000 shares of the stock for $24 per share. As a result of the stock issue - ANSWER- total assets would increase by $240,000 cash flow from financing activities would increase by $240,000 the income statement would not be affected how will paying a cash dividend that was previously declared affect a corporation's financial statements - ANSWER- total assets and total liabilities will decrease which of the following statements is TRUE - ANSWER- corporations are not legally required to declare cash dividends declaring a cash dividend is a - ANSWER- claims exchange event a company's financial statements are not impacted on the date of ... of a cash dividend - ANSWER- record a corporation becomes legally obligated to make a cash dividend on the ... date - ANSWER- declaration a ... is owned by a single individual who is responsible for making business and profit distribution decisions - ANSWER- proprietorship when a corporation appropriates retained earnings - ANSWER- total liabilities are not affected total assets are not affected Assume that Base Line Incorporated is authorized to issue 50,000 shares of $15 stated value common stock. On 1/1, Y1, Base Line issued 10,000 shares of the stock for $24 per share. which of the following financial statements would be affected by the stock issue - ANSWER- statement of changes in stockholders equity statement of cash flows balance sheet ... are able to generate billions of dollars of capital by pooling the resources of millions of owners through public stock and bond offerings - ANSWER- corporations the journal entry to record the issue of $10 stated value stock for $25 cash will include a ... to the cash account, a ... to the common stock account, and a ... additional paid in Assume that Base Line Incorporated is authorized to issue 50,000 shares of $15 stated value common stock. On 1/1, Y1, Base Line issued 10,000 shares of the stock for $24 per share. Immediately after the issue, Base Line's balance sheet would show - ANSWER- $90,000 of paid-in capital in excess of stated value $24 issue price - $15 stated value = $9 in excess of stated x 10,000 shares = $90,000 the journal entry to record the issue of $10 par value stock for $25 cash will include a - ANSWER- debit cash credit common stock credit to the paid in capital excess of par value account t/f: companies issue only one class of common stock - ANSWER- false Assume that Base Line Incorporated is authorized to issue 50,000 shares of $15 stated value common stock. On 1/1, Y1, Base Line issued 10,000 shares of the stock for $24 per share. Which of the following financial statements would be affected by the stock issue? - ANSWER- balance sheet statement of changes in stockholders' equity statement of cash flows when a company issues no-par common stock, the: - ANSWER- entire amount of the proceeds is placed into the Common Stock account; issuing no-par common stock increases cash and common stock by the same amount. It is also a cash inflow from financing activities cash inflow is classified as a financing activity; issuing no-par common stock increases cash and common stock by the same amount. It is also a cash inflow from financing activities the journal entry to record an appropriation of retained earnings will include a ... to the appropriated retained earnings account, a ... to the retained earnings account - ANSWER- credit debit If Pepper Company has a price-earnings ratio of 32 and Squash Company has a priceearnings ratio of 24, this may suggest that the stock market is ... optimistic about Pepper Company's future earnings potential compared to Squash Company's - ANSWER- more investors are willing to pay more for current earnings (high P/E ratio) when they believe future earnings will grow ... held companies can generally be controlled with smaller percentages of ownership than ... held companies - ANSWER- widely closely t/f: the stated value of a share of stock is established by the federal government - ANSWER- false assigned by board of directors of stock Thomas Company has $120,000 of assets, $40,000 of liabilities, $50,000 of stock, and $30,000 of retained earnings. Investors own 25,000 shares of Thomas' stock. The stock has a current market value of $5.20 per share. Based on this information, the book t/f: Acme Company reported significant growth in 2012; it was less growth than analysts expected. Under these conditions, Acme's stock may decline - ANSWER- true