Question :
18.3 Learning Objective 18-3
1) If preferred dividends limited to the : 1171124
18.3 Learning Objective 18-3
1) If preferred dividends are limited to the stated rate of dividend, the preferred stock is:
A) non-cumulative.
B) cumulative.
C) participating.
D) nonparticipating.
2) The entry to record MidIowa.net selling 1,000 shares of $6.00 par value common stock at $8.00 would be to:
A) debit Cash $8,000; credit Common Stock $6,000; credit Paid-in Capital in Excess of Par Value-Common $2,000.
B) debit Cash $8,000; credit Common Stock $8,000.
C) debit Cash $6,000; debit Paid-in Capital in Excess of Par Value-Common $2,000; credit Common Stock $8,000.
D) None of these answers is correct.
3) The entry to record selling 400 shares of no-par common stock with a stated value of $60 for $70 would be to:
A) debit Cash $28,000; credit Common Stock $28,000.
B) debit Cash $24,000; credit Common Stock $24,000.
C) debit Cash $24,000; credit Common Stock $28,000; debit Paid-in Capital in Excess of Par Value-Common $4,000.
D) debit Cash $28,000; credit Common Stock $24,000; credit Paid-in Capital in Excess of Stated Value-Common $4,000.
4) The entry to record selling 100 shares of no-par common stock with a stated value of $30 for $40 would be to:
A) debit Common Stock for $4,000; credit Cash for $4,000.
B) debit Cash for $4,000; credit Common Stock for $4,000.
C) debit Cash for $4,000; credit Common Stock for $3,000; credit Paid-In Capital in Excess of Stated Value-Common for $1,000.
D) debit Cash for $4,000; credit Common Stock for $1,000; credit Paid-In Capital in Excess of Par Value-Common for $3,000.
5) Five hundred shares of $26 par common stock was exchanged for a piece of equipment with a fair market value of $13,500. The journal entry to record the transaction would include a:
A) credit to Equipment for $13,000.
B) debit to Common Stock for $13,500.
C) credit to Paid-In Capital in Excess of Par Value-Common for $500.
D) credit to Common Stock for $13,500.
6) When stock is exchanged for non-cash assets:
A) debit the asset for prior book value; credit Common Stock for cash received.
B) debit assets for market value; credit Common Stock for par value and, if needed, Paid-in Capital in Excess of Par Value-Common.
C) debit assets for market value; credit Common Stock for market value.
D) debit assets for par value; credit Common Stock for par value.
7) Organization costs are:
A) part of the company’s start-up and are listed as expenses.
B) listed as an intangible asset on the balance sheet.
C) a current asset on the balance sheet.
D) a liability on the balance sheet.
8) A note payable was recorded as additional paid-in capital. This error would cause:
A) the period’s net income to be understated.
B) the period’s net income to be overstated.
C) the period end liabilities to be understated.
D) None of these is correct.
9) Common stock was sold in excess of par; the excess was credited to Sales. This error would cause:
A) the period’s net income to be understated.
B) the period’s net income to be overstated.
C) the period end assets to be overstated.
D) None of these is correct.
10) No entry was recorded for the exchange of stock for land. This error would cause:
A) the period end stockholders’ equity to be understated.
B) the period end stockholders’ equity to be overstated.
C) the period’s end assets to be understated.
D) Both A and C are correct.
