Question : 74. When a stock dividend declared, total stockholders’ equity will: A. Decrease.B. Increase.C. Not change.D. Increase : 1229418

74. When a stock dividend is declared, total stockholders’ equity will: 
A. Decrease.
B. Increase.
C. Not change.
D. Increase or decrease, depending upon certain variables.

75. Comprehensive income can be displayed to users of financial statements in which of the following way(s): 
A. As a second income statement.
B. As a single income statement that includes both the components of net income and the components of other comprehensive income.
C. As an element in the changes in stockholders’ equity displayed as a column in the statement of stockholders’ equity.
D. Either as a second income statement, as a single income statement that includes both the components of net income and the components of other comprehensive income, or as an element in the changes in stockholders’ equity displayed as a column in the statement of stockholders’ equity.

76. Which of the following would be treated as a prior period adjustment by Gold Corporation in 2010? 
A. In 2010, it was discovered that Gold Corporation recorded the purchase of a warehouse in 2007 as a debit to Repairs Expense.
B. In 2010, Gold Corporation switched from the straight-line method of depreciation to another method of computing depreciation.
C. In 2010, Gold Corporation’s management decided that the estimated useful life of its computer equipment should be changed from five years to nine years.
D. In 2010, Gold Corporation sold a segment of the business that it has operated since 1996.

77. A prior period adjustment appears in: 
A. The income statement following the subtotal “Income before Prior Period Adjustments.”
B. The statement of retained earnings, as an adjustment to the ending balance of retained earnings.
C. Footnotes to the financial statements.
D. The statement of retained earnings, as an adjustment to the beginning balance of retained earnings.

78. After preparing the financial statements for 2011, the accountant for the Dawson Corporation discovered that a prior period adjustment had been omitted from the 2009 financial statements. Which of the following is most likely to require correction as a result of this oversight? 
A. Earnings per share as originally computed.
B. Net income for 2011 as originally reported.
C. Ending retained earnings at December 31, 2011.
D. Extraordinary items as originally reported.

79. A prior period adjustment appears in the financial statements of the current year when: 
A. An error was made in computing the net income of the current period.
B. An error was made in measuring the net income of a previous year or years.
C. An extraordinary loss in a prior year was included among normal results of operations in the prior year.
D. Earnings per share figures from prior years are restated to reflect the increased number of shares outstanding due to a stock split or a stock dividend.

80. A restriction of retained earnings: 
A. Reduces the dollar amount of retained earnings shown in the balance sheet.
B. Appears in the statement of retained earnings as a reduction of ending retained earnings.
C. Appears in the liability section of the balance sheet.
D. Limits the dollar amount of dividends a corporation may declare.

81. Which of the following items would not reduce retained earnings? 
A. A common stock dividend.
B. A preferred stock dividend.
C. A cash dividend.
D. Cash payment of a previously declared dividend.

82. A liquidating dividend: 
A. Occurs only when a company is going out of business.
B. Occurs when a corporation pays a dividend that exceeds the balance in the retained earnings account.
C. Is an expense to the corporation.
D. Occurs only when the corporation has a loss for the year.

83. The statement of stockholders’ equity: 
A. Is a required financial statement.
B. May be issued as a substitute for the statement of retained earnings.
C. Shows the changes during the year in all stockholders’ equity accounts except retained earnings.
D. Is a statement sent to each stockholder showing that person’s return on equity.