11) All of the following are basic rights of a shareholder
except:
A) the right to vote
B) the right to receive a proportionate share of any assets remaining before the corporation pays its liabilities in the event of liquidation
C) the right to maintain one's proportionate ownership in the corporation
D) the right to receive a proportionate part of any dividend
12) If a corporation issues only one class of shares, it must be:
A) par value
B) preferred
C) common
D) common or preferred
13) In a corporation, the two basic sources of shareholders' equity are:
A) share capital and operating capital
B) share capital and retained earnings
C) donated capital and share capital
D) donated capital and retained earnings
14) The choice between issuing common shares or preferred shares is based upon:
A) the amount of financing required
B) the payment of dividends
C) the right to vote
D) the right to receive dividends first
15) Assets received in exchange for the issuance of stock should be recorded at:
A) historical cost
B) historical cost less accumulated amortization taken to date
C) fair market value as determined by a good-faith estimate from independent appraisers
D) book value prior to the issuance
16) Quo Corporation issues 100 common shares for $12 per share. This transaction will include a:
A) credit to Retained Earnings for $1,200
B) credit to Contributed Surplus for $1,200
C) debit to Common Shares for $1,200
D) credit to Common Shares for $1,200
17) The issuance of preferred shares requires a:
A) debit to Retained Earnings
B) credit to Retained Earnings
C) debit to Share Capital, Preferred
D) credit to Share Capital, Preferred
18) What effect does an investment of cash in a corporation have on the corporation's balance sheet?
A) It increases assets and decreases liabilities.
B) It increases assets and increases liabilities.
C) It increases assets and increases shareholders' equity.
D) It increases assets and decreases shareholders' equity.
19) The issuance of common shares requires a:
A) credit to Retained Earnings
B) debit to Retained Earnings
C) credit to Common Shares
D) debit to Common Shares
20) The entry to record the issuance of 12,500 common shares at $2.50 per share includes a:
A) debit to Retained Earnings for $31,250
B) credit to Retained Earnings for $31,250
C) credit to Common Shares for $31,250
D) credit to Contributed Surplus for $31,250