2024 – Question 1 When treasury stock is reissued for more than cost A debit Cash

Question 1 
When treasury stock is reissued for more than cost:

A. debit Cash; credit Treasury Stock and Paid-in Capital from Treasury Stock.
B. debit Cash; credit Treasury Stock.
C. debit Cash; credit Treasury Stock and Retained Earnings.
D. debit Cash; credit Common Stock and Paid-in Capital from Common Stock.
Question 2 
When the corporation has only common stock, the total of stockholders’ equity divided by the number of shares issued equals:

A. market value.
B. book value per share.
C. dividend per share.
D. redemption value.
Question 3 
Which of the following statements is false of treasury stock?

A. It has a right to dividends.
B. It is stock that is outstanding.
C. It has a right to vote.
D. All of the statements are false.
Question 4 
ABC Corporation offered a four-for-one stock split. The number of outstanding shares before the split was 15,000 and the par value was $20 per share. After the split, what was the par value and number of shares?

A. 3,750 shares and $80 per share
B. 3,750 shares and $5 per share
C. 60,000 shares and $80 per share
D. 60,000 shares and $5 per share
Question 5 
When treasury stock was sold at cost, Cash was debited and Common Stock was credited. This error would cause:

A. the total period end stockholders’ equity to be overstated.
B. the period end assets to be overstated.
C. the period end liabilities to be overstated.
D. None of these are correct.
Question 6 
when O’Rourke Corporation sells treasury stock for more than the original cost:

A. paid-in capital increases.
B. stockholders’ equity increases.
C. retained earnings may increase.
D. retained earnings may decrease.
Question 7 
The journal entry to record the issuance of a stock dividend is to:

A. debit Common Stock Dividend Distributable (number of shares × par value); credit Cash.
B. debit Common Stock Dividends Distributable (number of shares × market value common stock); credit Common Stock (same).
C. debit Retained Earnings (market value × number of shares); credit Common Stock Dividends Distributable (number of shares × par value); credit Paid-in Capital in Excess of Par-Stock Dividend.
D. debit Common Stock Dividend Distributable (number of shares × par value common stock); credit Common Stock (same).

Question 8 
Farm and Supply reissued 100 shares of treasury stock at $20 that had been reacquired for $15 per share. What is the entry?

A. Debit Cash $1,500; Paid-In Capital from Treasury Stock $500, credit Treasury Stock-Common $2,000
B. Debit Cash $2,000; credit Treasury Stock-Common $1,500, Paid-In Capital from Treasury Stock $500
C. Debit Cash $2,000; credit Treasury Stock-Common $2,000
D. None of these answers are correct.
Question 9 
If total stockholders’ equity is $90,000 with 5,000 common shares outstanding, what is the book value per share?
A. $17,000
B. $45.00
C. $1.80
D. $18.00
Question 10 
What is the book value per share of common stock if total stockholders’ equity is $450,000 with 15,000 shares of common stock outstanding?

A. $3.00
B. $3.33
C. $30.00
D. $300.00

Question 11 
Appropriations to retained earnings can be:

A. a decrease in total retained earnings.
B. contractual only.
C. an increase in retained earnings.
D. None of these answers are correct.
Question 12 
Cody’s Western Wear has 2,000 shares of $10 par value common stock outstanding. During the current year, the company distributed a 10% stock dividend. The market value of the stock at that time was $16 per share. Cody’s total stockholders’ equity should increase or decrease by:

A. $2,000.
B. ($3,200).
C. $0.
D. $1,200.
Question 13 
Typically, the only credit to the retained earnings account for a corporation is:

A. the initial investment of stockholders.
B. any withdrawals by the owners.
C. net loss of the period.
D. net income of the period.
Question 14 
When treasury stock is purchased:

A. issued shares increase.
B. authorized shares decrease.
C. outstanding shares decrease.
D. None of these answers are correct.
Question 15 
When treasury stock was sold below cost, the decrease was debited to Loss on Sale. This error would cause:

A. the period end liabilities to be overstated.
B. the period end assets to be overstated.
C. the period end stockholders’ equity to be overstated.
D. Both A and C are correct.
Question 16 
Malcolm Corporation declared a dividend of $5 per share on 1,000 shares. The entry to record the transaction would be to:

A. debit Dividends Expense $5,000; credit Cash $5,000.
B. debit Dividends Payable $5,000; credit Retained Earnings $5,000.
C. credit Cash $5,000, debit Dividends Expense $5000.
D. debit Retained Earnings $5,000; credit Dividends Payable $5,000.
Question 17 
The cash purchase of treasury stock was recorded as a purchase on account. This error would cause:

A. the period end liabilities to be overstated.
B. the period’s net income to be overstated.
C. the period end assets to be understated.
D. the period end stockholders’ equity to be overstated.

Question 18 
Which of the following dividend dates does not get a formal journal entry?

A. Date of declaration
B. Date of record
C. Date of payment
D. All receive formal journal entries.
Question 19 
Total stockholders’ equity consists of retained earnings of $150,000 and paid-in capital of $600,000. There are 30,000 common shares outstanding. What is the book value per share?
A. $25.00 per share
B. $20.00 per share
C. $ 5.00 per share
D. $15.00 per share
Question 20 
Changes in retained earnings can result from:

A. net income or net loss.
B. effects of prior period adjustments.
C. dividends being declared.
D. All of these answers are correct