Question

Fill in blanks and true or false

1.To start a corporation in the U.S., it is necessary to file an application in one of the states. The legal document that the state approves is the
____.

2.One of the advantages of the corporation form of business as opposed to a partnership form is the ease of transferring
____.

3.At a corporation, Assets minus Liabilities is____.

4.Shares of stock that have been issued and have not been reacquired by the issuing corporation are called
____ shares.

5.If a corporation has issued only one type of stock, it is
____ stock.

6.The type of stock that gets its dividend before the common stock gets its dividend is called
____stock.

7.The holders of____ stock elect the corporation's board of directors.

8.The par value of____ stock usually has no economic significance.

9.The dividend on preferred stock is often expressed as a percentage. To calculate the annual dividend on preferred stock, you multiply the percentage times the
____ of the preferred stock.

10.If a corporation issues 10% Preferred Stock $100 Par on a day when the financial markets demand 9%, this corporation's 10% Preferred Stock will sell for
____ than its par value.

11.If a common stock does not have a par value or a stated value, the entire proceeds from issuing the stock is credited to one account entitled
____.

12.Stockholder's equity is subdivided into two major sections:
____ and____.
.
13.The net income of a corporation is closed to the
____account.

14.Dividends declared by a corporation reduce the
____ section of stockholders' equity.

15.Dividends appear as an expense on the corporation's income statement.

True
or
False

16.If the board of directors does not declare the regular quarterly divided on its common stock, the corporation's liabilities will include the omitted dividend.

True
or
False

17.The ____ date is the date on which the corporation records a liability for its quarterly dividend.

18.The____date determines which stockholders will receive a declared dividend.

19.If a corporation declares a small stock dividend, the account that will be reduced by a debit entry is
____.

20.A stockholder will have the same number of shares after a 3-for-2 stock split or after a
____% stock dividend.

21.A corporation's own shares of stock that have been reacquired from its stockholders but have not been retired are called
____.

22.The account, Treasury Stock, will have either a zero balance or a
____(debit, credit) balance.

23.If a share of treasury stock is sold for more than its cost, the difference is credited to
____.

24.Treasury stock sales can result in a loss on the corporation's income statement.

True
or
False

25.If preferred stockholders have the opportunity to receive more than the stated dividend percentage, the stock is described as
____ preferred stock.

Answer 1

Answers

1.Articles of incorporation is the legal document,In the U.S., articles of incorporation are filed with the Office of the Secretary of State where the business chooses to incorporate.

2.It is easy to transfer ownership by selling shares to another party. liability for shareholders is limited,the company can trade anywhere in Australia,taxation rates can be more favourable.

3.Shareholders' equity is a company's total assets minus its total liabilities

4.Outstanding shares

5.Common stock

6.Preffered stock

7.Common stock

8.Common stock

9.Par value

10.More than its par value

11.Common stock

12.Paid up capital and Retained earnings

13.Retained earnings account

14.Retained earnings section

15.False

16.False

17.Declaration date

18.Record date

19.Retained earnings

20.50% stock dividend

21.Treasury stock

22.Debit balance

23.Paid in capital from treasury stock

24.False

25.Participaing preffered stock