Ch11

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20 Questions - Developed by: Karli - Developed on: - 2.862 taken

Acc201

  • 1
    A corporation is not an entity which is separate from its owners
  • 2
    A corporation can be organized for the purpose of making a profit or it may be not-for-profit
  • 3
    A corporation acts under its own name rather than in the name of its stockholders
  • 4
    If a corporation pays taxes on its income, then stockholders will not have to pay taxes on the dividends received from that corporation
  • 5
    A corporation must be incorporated in each state in which it does business
  • 6
    A stockholder has the right to vote in the election of the board of directors
  • 7
    A proxy is a legal document that instructs a stockholder's agent how to vote shares of stock for the stockholder
  • 8
    As soon as a corporation is authorized to issue stock, an accounting journal entry should be made recording the total value of shares authorized
  • 9
    The par value of common stock must always be equal to its market value on the date the stock is issued
  • 10
    When no-par value stock does not have a stated value, the entire proceeds from the issuance of the stock becomes legal capital
  • 11
    A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares
  • 12
    The market value of a corporation's stock is determined by the number of shares that the corporation has been authorized to issue
  • 13
    Stock can be issued only in exchange for cash
  • 14
    The par value of stock issued for non cash assets is never a factor in determining the cost of the assets received
  • 15
    The acquisition of treasury stock by a corporation increases total assets and total stockholder's equity
  • 16
    Treasury stock should not be classified as a current asset
  • 17
    Treasury stock purchased for $25 per share that is reissued at $20 per share, results in a loss on sale of treasury stock being recognized on the income statement
  • 18
    Treasury stock is a contra stockholders equity account
  • 19
    The number of common shares outstanding can never be greater than the number of shares issued
  • 20
    Preferred stock has contractual preference over common stock in certain areas

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