QUIZ IN CORPORATION:

1.

To start a corporation in the U.S., it is necessary to file an application in one of

the states. The legal document that the state approves is the

__________

2.

2.One of the advantages of the corporation form of business as opposed to a

partnership form is the ease of transferring
__________
.
3.
3.At a corporation, Assets minus Liabilities is
__________
.
4.
4.Shares of stock that have been issued and have not been reacquired by the
issuing corporation are called
__________
shares.
5.
5.If a corporation has issued only one type of stock, it is
__________
stock.
6.
6.The type of stock that gets its dividend before the common stock gets its
dividend is called
__________
stock.
7.
7.The holders of
__________
stock elect the corporation's board of directors.
8.
8.The par value of
__________
stock usually has no economic significance.
9.
9.The dividend on preferred stock is often expressed as a percentage. To
calculate the annual dividend on preferred stock, you multiply the percentage times the
__________
of the preferred stock.
10.
10.If a corporation issues 10% Preferred Stock $100 Par on a day when the
financial markets demand 9%, this corporation's 10% Preferred Stock will sell for
__________

than its par value.

11.If a common stock does not have a par value or a stated value, the entire
proceeds from issuing the stock is credited to one account entitled
__________
.
12.
12.Stockholder's equity is subdivided into two major sections:
__________
and
__________
.
13.
13.The net income of a corporation is closed to the
__________
account.
14.
14.Dividends declared by a corporation reduce the
__________
section of stockholders' equity.
15.
15.
Dividends appear as an expense on the corporation's income statement.
True
11.

False
16.

16.
If the board of directors does not declare the regular quarterly divided on its common
stock, the corporation's liabilities will include the omitted dividend.
True
False

17.

17.The
__________
date is the date on which the corporation records a liability for its quarterly dividend.
18.
18.The
__________
date determines which stockholders will receive a declared dividend.
19.
19.If a corporation declares a small stock dividend, the account that will be
reduced by a debit entry is
__________
.
20.
20.A stockholder will have the same number of shares after a 3-for-2 stock split
or after a
__________
% stock dividend.

21.

21.A corporation's own shares of stock that have been reacquired from its
stockholders but have not been retired are called
__________
.
22.
22.The account, Treasury Stock, will have either a zero balance or a
__________
(debit, credit) balance.
23.
23.If a share of treasury stock is sold for more than its cost, the difference is
credited to
__________
.
24.
24.
Treasury stock sales can result in a loss on the corporation's income statement.
True
False
25.

25.If preferred stockholders have the opportunity to receive more than the stated
dividend percentage, the stock is described as
__________
preferred stock.
26.
26.Dividends in arrears occur only on
__________
preferred stock.
27.
27.Dividends in arrears are reported in the financial statements in the
__________
.
28.
28.If a preferred stock can be exchanged for a stated number of common shares,
it is referred to as
__________
preferred stock.
29.
29.The book value per share of preferred stock is its
__________
plus any dividends in
__________
.
30.
30.Earnings per share means earnings per share of
__________
.
31.
31.A debit balance in Retained Earnings will appear in stockholders' equity as
__________
.
32.
32.The

__________
of a corporation declares the dividends.
33.
33.The directors of a corporation appoint
__________
to carry out the corporation's policies and directives.
34.
34.When a small stock dividend is declared, the
__________
value of the new shares is transferred from Retained Earnings to paid-in capital
accounts.
35.
35.A separate portion of stockholders' equity that reports certain gains and
losses on hedges, foreign currency translations, and pension liabilities that were not
part of net income shown on the income statement is