61. A deficit appears in a corporation's financial statements:
A. Among the operating expenses.
B. Among the liabilities.
C. As a deduction from assets.
D. As a deduction from total paid-in capital.
62. Which of the following would usually be the greatest amount?
A. The number of shares authorized.
B. The number of shares issued.
C. The number of shares outstanding.
D. They must all be the same amount.
63. In a corporation's organization chart, which is the highest position?
A. Stockholders.
B. Board of directors.
C. CEO.
D. President.
64. Which of the following best describes the relationship between revenue and retained earnings?
A. Revenue increases net income, which in turn increases retained earnings.
B. Revenue represents a cash receipt; retained earnings is an element of stockholders' equity.
C. Revenue represents the price of goods sold or services rendered; retained earnings represents cash available for paying dividends.
D. Retained earnings is equal to assets minus expenses.
65. The overall effect of declaring and distributing a cash dividend includes each of the following except:
A. Reducing total assets.
B. Reducing stockholders' equity.
C. Reducing the balance of the Retained Earnings account.
D. Reducing net income for the period.
66. If preferred stock is convertible, it is so at the option of the:
A. Board of directors.
B. CEO.
C. CFO.
D. Stockholders.
67. If a corporation has only common stock outstanding, which of the following constitutes legal capital at a particular date?
A. The amount in the Common Stock account.
B. The sum of the Common Stock account and any additional paid-in capital.
C. The total amount of stockholders' equity.
D. The sum of the Common Stock account and retained earnings.
68. The par value of the common stock of a large listed corporation:
A. Tends to establish a ceiling for the market price of the stock.
B. Tends to establish a floor for the market price of the stock.
C. Represents legal capital and is not related to the market price of the stock.
D. Is increased by net income and decreased by dividends.
69. A 2-for-1 stock split will:
A. Increase the total par value of the stock and increase the number of shares outstanding.
B. Decrease the total par value of the stock and increase the number of shares outstanding.
C. Not change the total par value of the stock and increase the number of shares outstanding.
D. Increase total stockholders' equity.
70. The entry to record the issuance of common stock at a price above its par value includes:
A. A credit to Cash.
B. A credit to a liability account for the difference between the price paid by the stockholders and the par value of the stock.
C. A credit to Additional Paid-in Capital: Common Stock.
D. A debit to Common Stock.