Question 1

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-A financial institution that records and maintains records of another company's stockholders.

Accepted Answer

A transfer agent records and maintains records of a company's stockholders.

Question 2

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-The account used to record the difference when issue price exceeds par value of stock

Accepted Answer

Paid-In Capital in Excess of Par is the account used to record the difference when issue price exceeds par value of stock.

Question 3

Match each of the following stockholders' equity concepts to the appropriate term a-h).
-Creditors cannot pursue stockholders' personal assets to satisfy claims

Accepted Answer

Limited liability is the concept that ensures creditors cannot pursue stockholders' personal assets to satisfy claims.

Note: The other terms listed are also related to stockholders' equity, but do not directly relate to the given concept.

Question 4

Match the following stockholders' equity concepts to the appropriate term a-h).
-Equity account reflecting shares "owed" to stockholders

Accepted Answer

Stock Dividends Distributable is the equity account that reflects shares "owed" to stockholders, representing a commitment by the company to distribute additional shares to its shareholders.

Question 5

Match the following stockholders' equity concepts to the appropriate term a-h).
-Shares of common stock that were issued and then reacquired by a company

Accepted Answer

Treasury stock is stock that a company has previously issued and then subsequently repurchased from shareholders. It is considered a deduction from shareholders' equity.

Question 6

Match the following stockholders' equity concepts to the appropriate term a-h).
-The date when dividends are actually distributed to stockholders

Accepted Answer

The date when dividends are actually distributed to stockholders is referred to as the date of payment.

Answer: B 
 The date of record is the date when a shareholder must own shares in order to receive a dividend.

Answer: C 
 Stock dividends distributable represents the amount of stock dividends that a company has declared but not yet distributed to shareholders.

Answer: D 
 The date of declaration is the date when a company's board of directors announces its intention to pay a dividend.

Answer: E 
 Treasury stock represents shares of a company's own stock that it has repurchased and is holding for future use.

Answer: F 
 Preferred stock is a type of equity ownership in a company that usually pays a fixed dividend and has priority over common stock in the payment of dividends and in the event of liquidation.

Answer: A 
 A cash dividend represents a payment of cash to shareholders.

Answer: H 
 Paid-in capital in excess of par represents the amount of money that shareholders have paid for shares in excess of their par value.

Question 7

Match each of the following stockholders' equity concepts to the appropriate term a-h).
-Group which meets periodically to establish corporate policies

Accepted Answer

The board of directors is a group of individuals elected by the shareholders of a corporation to establish corporate policies and make decisions on major company issues.

Question 8

Match the following stockholders' equity concepts to the appropriate term a-h).
-The date that is used to determine the owners of stock who will receive the current dividend

Accepted Answer

The date of record is used to determine the owners of stock who will receive the current dividend.

Question 9

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-The number of shares currently held by stockholders

Accepted Answer

Outstanding shares refer to the number of shares that have been issued by the company and are currently held by investors, including both public shareholders and institutional investors. This excludes any treasury shares the company may have repurchased.

Question 10

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-The dollar amount assigned to each share of stock

Accepted Answer

The dollar amount assigned to each share of stock is known as the "Par value." This is a nominal value established in the corporate charter that represents the minimum price at which shares can be issued.

Question 11

Match the following stockholders' equity concepts to the appropriate term a-h).
-Account used when shares are issued for an amount greater than par value

Accepted Answer

Paid-In Capital in Excess of Par is the account used when shares are issued for an amount greater than par value.

Question 12

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-The number of shares sold to stockholders

Accepted Answer

Issued shares are the shares that have been sold to and are held by the shareholders. This does not include shares that have been repurchased by the company.

Question 13

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-The maximum number of shares a company can issue to shareholders

Accepted Answer

Authorized shares refer to the maximum number of shares a company can issue to shareholders.

Answer: B
 Issued shares refer to the number of shares actually sold or allocated to shareholders.

Answer: C
 Outstanding shares refer to the number of shares currently held by shareholders.

Answer: D
 Par value refers to the nominal or face value of a share, usually set at a low amount.

Answer: E
 Common stock represents the basic ownership of a company and typically carries voting rights.

Answer: F
 Preferred stock represents a class of ownership with preferential treatment in terms of dividends and liquidation.

Answer: G
 Paid-In Capital in Excess of Par represents the amount paid by shareholders for shares above their par value.

Answer: H
 A transfer agent is a financial institution that manages the transfer of shares between investors.

Question 14

Match the following stockholders' equity concepts to the appropriate term a-h).
-Owners of this class of stock are entitled to receive dividends first

Accepted Answer

Owners of preferred stock are entitled to receive dividends first.

Answer: D 
 Date of declaration is the date on which the company's board of directors declares the payment of dividends.

Answer: C 
 Stock dividends distributable is a liability account that represents the value of the additional shares that will be distributed to stockholders as a result of a stock dividend.

Answer: G 
 Date of payment is the date on which the company actually pays the dividend to its stockholders.

Answer: E 
 Treasury stock is stock that a company has repurchased from stockholders and is holding in its treasury, generally with the intention of reselling it in the future.

Answer: A 
 Cash dividend is a distribution of cash to stockholders, typically paid out of a company's earnings.

Answer: B 
 Date of record is the date on which a company determines the stockholders who are technically entitled to receive a dividend.

Answer: H 
 Paid-in capital in excess of par represents the amount of money that a company receives from stockholders in excess of the par value of the stock.

Question 15

Match the following stockholders' equity concepts to the appropriate term a-h).
-The day of the event that creates a liability to company

Accepted Answer

The date of declaration is the day on which the company's board of directors declares a dividend, which creates a liability for the company.

Answer: B
 The date of record is the day on which the company determines which shareholders are entitled to receive the dividend.

Answer: C
 Stock dividends distributable represents the number of additional shares that the company will distribute to its shareholders as a dividend.

Answer: G
 The date of payment is the day on which the company actually pays the dividend to its shareholders.

Answer: E
 Treasury stock represents shares of the company's own stock that it has repurchased and has not retired.

Answer: F
 Preferred stock is a type of stock that typically pays a fixed dividend and has a higher priority than common stock in terms of dividends and asset distributions in the event of liquidation.

Answer: A
 Cash dividend is a payment to shareholders in the form of cash.

Answer: H
 Paid-in capital in excess of par represents the amount that shareholders paid for the company's stock that was in excess of its par value.

Question 16

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-A class of stock having first rights to dividends of a corporation

Accepted Answer

Preferred stock is a class of stock having first priority rights to dividends over common stock.

Answer: E 
 Common stock represents ownership in a corporation, but does not have priority rights to dividends.

Answer: G 
 Paid-in capital in excess of par represents the amount shareholders paid for their shares above the par value.

Answer: D 
 Par value is the nominal or face value assigned to a share of stock.

Answer: A 
 Authorized shares are the maximum number of shares a corporation is authorized to issue.

Answer: B 
 Issued shares are the total number of shares a corporation has sold or issued to shareholders.

Answer: C 
 Outstanding shares are the total number of shares held by shareholders, including those that have been issued and repurchased by the corporation.

Answer: H 
 A transfer agent is a third-party entity responsible for maintaining records of stock ownership and facilitating share transfers.

Question 17

Match each of the following stockholders' equity concepts to the most appropriate term a-h).
-A class of stock that provides no preference rights to shareholders

Accepted Answer

Common stock represents ownership in a company and typically provides no preference rights to shareholders.

Answer: F
 Preferred stock provides preference rights to shareholders, such as priority in receiving dividends or in the event of liquidation.

Answer: D
 Par value is the nominal or face value assigned to each share of stock and is generally a small amount.

Answer: G
 Paid-In Capital in Excess of Par represents the amount of money received from the sale of stock that exceeds the par value.

Answer: A and H
 Authorized shares are the maximum number of shares that a company is allowed to issue, while the transfer agent maintains records of stock ownership and facilitates the transfer of ownership between investors.

Question 18

Match each of the following stockholders' equity concepts to the appropriate term a-h).
-Corporate income distributed to stockholders

Accepted Answer

Dividends are corporate income that is distributed to stockholders.

Question 19

Match the following stockholders' equity concepts to the appropriate term a-h).
-Cash distribution of a company's earnings to stockholders

Accepted Answer

Answer: A
 A is the correct choice as it directly matches the concept described.

B) Date of record: This concept refers to the date on which a company determines the eligible stockholders to receive a dividend.
Answer: B
 B is the correct choice as it directly matches the concept described.

C) Stock Dividends Distributable: This concept refers to the portion of stock dividends announced but not yet issued to stockholders.
Answer: C
 C is the correct choice as it directly matches the concept described.

D) Date of declaration: This concept refers to the date on which a company's board of directors formally approves and declares a dividend.
Answer: D
 D is the correct choice as it directly matches the concept described.

E) Treasury stock: This concept refers to shares of a company's own stock that it has repurchased and is holding as an asset on its balance sheet.
Answer: E
 E is the correct choice as it directly matches the concept described.

F) Preferred stock: This concept refers to a class of stock that has preferential rights and may receive dividends before common stockholders.
Answer: F
 F is the correct choice as it directly matches the concept described.

G) Date of payment: This concept refers to the date on which a company disburses the declared dividend payments to its stockholders.
Answer: G
 G is the correct choice as it directly matches the concept described.

H) Paid-In Capital in Excess of Par: This concept refers to the amount of money a company receives in excess of the par value of its stock when issuing new shares.
Answer: H
 H is the correct choice as it directly matches the concept described.

Question 20

For the current year ended, ABC had the following transactions:
- Issued 10,000 shares of $2.00 par value common stock for $12.00 per share.
- Issued 3,000 shares of $50 par value 6% preferred stock for $70 per share.
- Purchased 1,000 shares of previously issued common stock for $15.00 per share.
- Reported net income of $200,000.
- Declared and paid a total dividend of $40,000.
Assume that retained earnings had a beginning balance of $75,000.

-$150,000

Accepted Answer

The answer of For the current year ended, ABC had...

Quiz 11: Corporations: Organization, Stock Transactions, and Dividends

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -A financial institution that records and maintains records of another company's stockholders.

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The account used to record the difference when issue price exceeds par value of stock

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -Creditors cannot pursue stockholders' personal assets to satisfy claims

Match the following stockholders' equity concepts to the appropriate term a-h) . -Equity account reflecting shares "owed" to stockholders

Match the following stockholders' equity concepts to the appropriate term a-h) . -Shares of common stock that were issued and then reacquired by a company

Match the following stockholders' equity concepts to the appropriate term a-h) . -The date when dividends are actually distributed to stockholders

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -Group which meets periodically to establish corporate policies

Match the following stockholders' equity concepts to the appropriate term a-h) . -The date that is used to determine the owners of stock who will receive the current dividend

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The number of shares currently held by stockholders

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The dollar amount assigned to each share of stock

Match the following stockholders' equity concepts to the appropriate term a-h) . -Account used when shares are issued for an amount greater than par value

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The number of shares sold to stockholders

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -The maximum number of shares a company can issue to shareholders

Match the following stockholders' equity concepts to the appropriate term a-h) . -Owners of this class of stock are entitled to receive dividends first

Match the following stockholders' equity concepts to the appropriate term a-h) . -The day of the event that creates a liability to company

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -A class of stock having first rights to dividends of a corporation

Match each of the following stockholders' equity concepts to the most appropriate term a-h) . -A class of stock that provides no preference rights to shareholders

Match each of the following stockholders' equity concepts to the appropriate term a-h) . -Corporate income distributed to stockholders

Match the following stockholders' equity concepts to the appropriate term a-h) . -Cash distribution of a company's earnings to stockholders