51. Which of the following is not an addition to total paid-in-capital?
A. Retained earnings.
B. Treasury stock.
C. Neither retained earnings nor treasury stock.
D. Both retained earnings and treasury stock.
52. A primary disadvantage of the corporate form of organization is:
A. Unlimited personal liability for business debts.
B. Ownership is difficult to transfer.
C. Corporate earnings are subject to double taxation.
D. Management is separated from ownership.
53. Public corporations are required by law or regulation to perform all of the following except:
A. Submit much of their financial information to the SEC for review.
B. Make regularly scheduled dividend payments to all stockholders.
C. Have their annual financial statements audited by an independent CPA.
D. Disclose their financial information to the public.
54. Which of the following is not a right of stockholders?
A. To vote for directors and on key issues.
B. To participate in dividends declared.
C. To share in the distribution of assets if the corporation is liquidated.
D. All three of the above are rights of the stockholders.
55. The rights of a common stockholder do not include the right:
A. To vote for directors.
B. To withdraw a share of corporate net assets proportionate to the person's stockholdings.
C. To receive a proportionate share of corporate assets upon liquidation, after creditors have been paid.
D. To share in profits when the board of directors declares a dividend.
56. The directors of a corporation:
A. Are hired by the officers to run the business on a day-to-day basis.
B. May not own stock in the same corporation or be officers of the same corporation.
C. Are responsible for formulating corporate policy and for hiring corporate officers.
D. Are elected by the shareholders to run day-to-day operations.
57. Which of the following individuals has the most power to influence corporate policy on a long-term basis?
A. A shareholder owning 60% of the outstanding common stock.
B. A shareholder owning 80% of the outstanding preferred stock.
C. The treasurer of the corporation.
D. The controller of the corporation.
58. The term paid-in capital means:
A. All assets other than retained earnings.
B. Legal capital plus retained earnings.
C. Total stockholders' equity minus retained earnings.
D. Legal capital minus retained earnings.
59. If a corporation has issued a single class of stock, it must be:
A. Common Stock.
B. Preferred Stock.
C. Stock issued at Par-value.
D. Cumulative preferred Stock.
60. Which of the following best describes retained earnings?
A. Cash available for dividends.
B. The amount initially invested in the business by stockholders.
C. Cash available for expansion and growth.
D. Income that has been reinvested in the business rather than distributed as dividends to stockholders.