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  51. The financial statement impact for a company that desires to make a change in accounting policy include(s): A. Retrospective restatement of prior period financial statements. B. Financial impact charged or credited (net of tax) to the opening balance of retained earnings. C. The nature and justification for the change. D. The effect of.
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26. Cumulative preferred shares carry the right to be paid both current and all prior periods' unpaid dividends before any dividends are paid to common shareholders. 27. Shares are most commonly issued for cash. 28. If shares are issued for non-cash assets, the assets are always recorded at the current market value.
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  46. Buying shares in a corporation is attractive to investors because: A. Shareholders are not liable for the corporation's actions and debts. B. Shares are easily transferred. C. A corporation has unlimited life. D. Shareholders are not agents of the corporation. E. All of these answers are correct. 47. The category of equity for a corporation.
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  31. A partnership agreement is: A. The legal relationship among the partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the apparent scope of the partnership's business. B. The agreement between partners that sets forth the terms under which the affairs.
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21. A corporation can issue two general types of shares: common and preferred. 22. Common shares usually carry a preference for dividends. 23. Special rights for preferred shares may include a preference in receiving dividends and in the distribution of assets if the corporation is liquidated. 24. One of the preference rights for.
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41. Dividends represent the distribution of profits to the shareholders of a corporation. 42. Dividends represent the distribution of profits to the managers of a corporation. 43. Callable preferred shares give the shareholders the option of exchanging their preferred shares into common shares at a specified rate.     44. The costs of bringing a.
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111. Match each of the following terms with the appropriate definition.   1. Market value per share Preferred shares that give shareholders the option of exchanging their preferred shares for common shares at a specified rate.   2. Equity financing The amount that must be paid to call and retire a preferred share.   3. Preferred share Obtaining capital,.
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  56. Restrictions on retained earnings can be: A. Limits that identify how much of the retained earnings balance is not available for dividends or the repurchase of shares B. Statutory limits set by government. C. Due to loan agreements. D. Set by a corporation's directors in order to limit dividends and maintain cash. E. All.
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11. Net incomes or losses are recorded in a share capital account. 12. The equity of a corporation changes because of net income or losses, distributions of incomes (dividends) and shareholder investments. 13. Income tax expense is recorded with the operating expenses on the income statement for a corporation. 14. The equity section.
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67. Explain where each of the following items should appear in the financial statements of Reid and Right Corp, a publishing company: (1) After the retirement of the company's CEO, the company has decided to downsize its operations. This will include the elimination of the children's book segment of operations. (2) The.
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2. A limited liability company is a corporation for professionals such as lawyers and accountants. 3. A corporation is a legal entity separate from its owners. 4. Corporations can be either public or limited. 5. A privately held corporation has a limited life because it is tied to the physical lives of its.
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102. During 2015, Lee Corporation reported revenues of $527,000 and expenses of $330,000, and declared cash dividends of $45,000. Retained Earnings on January 1, 2015 was $168,000. 1. Prepare closing entries at December 31, 2015. 2. Calculate the balance in Retained Earnings on December 31, 2015.     .
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26. A capital deficiency can arise from liquidation losses, excessive withdrawals, or recurring losses in prior periods. 27. If a partner is unable to cover a deficiency and the other partners absorb the deficiency, then that partner is thus relieved of all liability. 28. If at the time of partnership liquidation, Breck.
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  61. A dividend preference for preferred shares means that: A. Preferred shareholders are allocated their dividends before any dividends are allocated to common shareholders. B. Preferred shareholders are guaranteed dividends. C. Dividends are paid quarterly. D. Only preferred shareholders will receive dividends. E. All of these answers are correct. 62. Brian's Stereo Ltd issued preferred shares.
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36. When issuing common shares, the initial investment is credited to Common Shares. 37. The liability for preferred dividends declared is recorded on the date of record. 38. Unpaid preferred dividends are called dividends in arrears. 39. The date of record is the date the directors vote to pay a dividend to shareholders. 40..
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  41. A share dividend: A. Is a distribution of additional shares to its shareholders without receiving any payment. B. Transfers a portion of equity from retained earnings to contributed capital. C. Is often referred to as a stock dividend. D. Does not reduce a corporation's assets and equity. E. All of these answers are correct. 42..
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110. Match each of the following terms with the appropriate definition. 1. Organization costs The costs of bringing a corporation into existence, including legal fees, promoters' fees, and amounts paid to the government to secure the charter.   2. Common shares A preferred share on which the right to receive dividends is lost for any.
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  61. The following data were obtained from Cook the Books Accounting Inc.: The number of outstanding shares is: A. 12,000. B. 18,000. C. 17,000. D. 23,000. E. 15,000. 62. Retirement of shares: A. Reduces the number of issued shares. B. Is permissible under law if the interest of the shareholders is not jeopardized. C. Is accounted for like treasury shares. D..
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98. Parker Corp has 1,000 $5, noncumulative, preferred shares outstanding, and $250,000 worth of common shares outstanding. During Parker's first year of operation, no dividends were paid, but during the second year, the company paid dividends of $45,000. How should the dividends be distributed? 99. Sanders Limited, since it was organized.
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104. A corporation is responsible for its own acts and debts. This is so because a corporation is _____________________. 105. Net incomes or losses and dividends of a corporation are recorded in the _____________ account. 106. ___________________ is the total amount of cash and other assets received by the corporation from its.
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95. On August 1, Gary Corporation issued 20,000 common shares in exchange for land with a fair market value of $205,000. Prepare the journal entry to record the transaction. 96. On January 1, Sharon Ltd's equity was as follows: common shares, unlimited shares authorized and 75,000 shares issued and outstanding. Prepare journal.
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  76. A preferred share on which the right to receive dividends is lost for any year that the dividends are not declared is a: A. Participating preferred share. B. Callable preferred share. C. Cumulative preferred share. D. Convertible preferred share. E. Noncumulative preferred share. 77. Preferred shares that the issuing corporation, at its option, may retire.
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6. Shares are attractive to investors because shareholders are not liable for the corporation's actions and debts and because shares are easily transferred. 7. The income of a corporation is taxed twice, first as corporate income and then as personal income to shareholders who receive cash dividends. 8. An underwriter keeps shareholder.
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  71. The payment of a dividend will reduce the following two accounts: A. Common shares and cash B. Cash and dividends payable. C. Equity and retained earnings. D. Retained earnings and dividends payable E. Equity and cash 72. The date a board of directors votes to pay a dividend is called the: A. Date of the annual.
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  51. The right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional shares of common shares issued by the corporation is called: A. Preemptive right. B. Proxy. C. Right to call. D. Financial leverage. E. Voting right. 52. Common shares: A. Represent residual equity in a corporation. B..
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70. Hard Wok Cafe Corporation has 100,000 common shares outstanding. The following transactions related to the company's shares took place during the year: Prepare the journal entries to record the transactions. 71. The Drain Surgeon Corp's equity on January 1 was as follows: common shares, unlimited shares authorized, 250,000 shares issued and.
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31. Corporations issue preferred shares in order to raise capital without sacrificing control of the corporation and to increase the return earned by common shareholders. 32. The use of preferred shares to increase return to common shareholders is an example of financial leverage. 33. When preferred shares are issued, this will always.
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  46. When a corporation calls in its outstanding shares and issues more than one new share in exchange for each old share, this is a: A. Share split. B. Share dividend. C. Cash dividend. D. Reverse share split. E. Liquidating dividend. 47. Failure to record the declaration and distribution of a share dividend would: A. Have no.
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2. A company can change from one acceptable accounting principle to another as long as the change improves the usefulness of information in its financial statements or it is required by IFRS. 3. If a company's activities include operations that are being discontinued, the income or loss effects of the discontinued.
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