writer "Catherine Mallory"tags ""folders "Accounting"description ""fileName "Acct 2302 Exam 1 (Ch. 13 & 14)"The prices of bringing a corporation right into presence, consisting of legal fees, promoter fees, and amounts phelp to obtain a charter are called:A. Minimum legal funding.B. Stock subscriptions.C. Organization Costs. D. Cumulative prices.E. Prepassist fees.C. Organization Costs.
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Buying stock in a corporation is attractive to investors because:A. Stockholders are not liable for the corporation"s actions and also debts.B. Stock is conveniently moved.C. A corporation has actually infinite life.D. Shareholters are not agents of the corporation.E. All of the over.
A proxy is:A. An amount of assets characterized bby state law that stockholders need to invest and leave invested in a corporation.B. A legal document that offers a disignated agent of a stockholder the power to vote the stock.C. An arbitrary amount assigned to no-par stock by the corporation"s board of directors.D. The ideal of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase added shares of prevalent stock issued by the corporation.E. A contactual commitment by an investor to purchase unissued shares of stock.
The board of directors of a corporation:A. May not also be executive police officers of the corporation, as a result of the separate entity principle.B. Are responsible for day-to-day operations of the organization.C. Are elected the corpoprice registrar.D. Are responsible for and have final authority for regulating corpoprice activities.E. Do not have the power to bind the corporation to contracts, due to absence of mutual firm.
The full amount of stock that a corporation"s charter permits it to concern is referred to as:A. Issued stock.B. Perferred stock.C. Authorized stock.D. Outstanding stock.E. Usual stock.
Par worth of a stock describes the:A. Maximum marketing price of the stock.B. Value assigned to a share of stock by the corpoprice charter.C. Dividfinish worth of the stock.D. Market worth of the stock on the date of the financial statements.E. Issue price of the stock.
Stockholders" equity consists of:A. Premiums and also discounts.B. Retained income and also cash.C. Long-term assets.D. Contributed funding and also kept income.E. Contributed resources and par value.
A class of stock that does not have actually a par worth, and have the right to usuallybe issued at any price without creating a minimum legal captial deficiency, is called:A. No-par stock.B. Convertible stock.C. Noncumulative stock.D. Callable stock.E. Discounted stock.
Owners of desired stock often do not have:A. The ideal to sell their stock on the open market.B. Preferral to dividends.C. Voting legal rights.D. Preference to assets at liquidation.E. Ownership rights to assets of the corporation.
Preferred stock on which the appropriate to obtain dividends it forfeited for any type of year that the dividends are not declared is described as:A. Callable desired stock.B. Participation desired stock.C. Cumulative desired stock.D. Noncumulative prferred stock.E. Convertible wanted stock.
A company issued 7% wanted stock through a $100 par worth. This suggests that:A. Preferred shareholders are entitled to 7% of the yearly earnings.B. Only 7% of the complete contributed capital have the right to be wanted stock.C. The sector price per share will certainly approximate $100 per share.D. The amount of the potential dividfinish is $7 per year per perferred share.E. Preferred shareholders have a guaranteed dividend.
Retained earnings:A. Usually consists of a company"s cumulative net earnings much less any type of net losses and also dividends asserted since its inception.B. Can just be appropriated by establishing aside a cash fund.C. Reexisting an amount of cash easily accessible to pay shareholders.D. Are never changed for anypoint other than net revenue or dividends.E. All of the above.
A. Normally is composed of a company"s cumulative net earnings less any type of net losses and also dividends declared given that its inception.
Prior period adjustments to financial statements have the right to result from:A. Changes in approximates.B. Extraordinary items.C. Disongoing operations.D. Changes in tax law.E. Using unacceptable accounting ethics.
A premium on widespread stock:A. Is the difference in between par value and concern price once the amount passist is below par.B. Is the amount passist in excess of par by purchasers of recently issued stock.C. Represents funding obtain on sale of stock.D. Is prohibited in many states.E. Represents profit from issuing stock.
The day a board of directors votes to pay a dividfinish is referred to as the:A. Date of document.B. Date of declaration.C. Date of payment.D. Date of stockholders" meeting.E. Liquidating date.
A corporation"s distribution of extra shares of its own stock to its stockholders without the recipt of any payment in return is dubbed a:A. Stock subscription.B. Premium on stock.C. Treasury Stock.D. Discount on Stock.E. Stock dividend.
Corporations frequently buy back their very own stock:A. To stop a hostile take-over.B. To have actually shares available for a merger or acquisition.C. To have shares easily accessible for employee compensation.D. To maintain industry value for the company stock.E. All of the above.
Stock that was reobtained and is still organized by the issuing corporation is called:A. Callable stock.B. Preferred stock.C. Treasury stock.D. Capital stock.E. Reconsidered stock.
Treasury stock is classified as:A. A liablity account.B. An asset account.C. A revenue account.D. A contra equity account.E. A contra ascollection account.
The following information were reported by a corporation:Authorized shares: 20,000Issued Shares: 15,000Treasury Shares: 3,000The variety of outstanding shares is:A. 12,000.B. 23,000.C. 20,000.D. 15,000.E. 17,000.
Sinking fund bonds:A. Required the issuer to set aside assets to retire the bonds at maturity.B. Required equal payments of both major and interemainder over the life of the bond issue.C. Decline in value over time.D. Are registered bonds.E. Are bearer bonds.
Bonds that have an alternative exercisable by the issuer to retire them at a stated dollar amount before maturity are understand as:A. Junk bonds.B. Serial bonds.C. Sinking fund bonds.D. Callable bonds.E. Convertible bonds.
A bond traded at 102 1/2 indicates that:A. The bond pays 2.5% interest.B. The bond traded at $1,025 per $1,000 bond.C. The industry price of interemainder is 2.5%.D. The bond were reexhausted at $1,025 each.E. The sector price of interemainder is 2 1/2% above the contract rate.
Secured bonds:A. Are backed by the issuer"s bank.B. Are the exact same as sinking money bonds.C. Are subordinated to those of other unsecured liabilities.D. Are called debentures.E. Have particular assets of the issuing firm pledged as collateral.
An advantage of bond financing is:A. Bonds perform not affects owners" manage.B. Interest on bonds is tax deductible.C. Bonds can increase return on equity.D. It enables firms to profession on the equity.E. All of the above.
A disadvantage of bonds is:A. Bonds require payment of routine interemainder.B. Bonds require payment of principal.C. Bonds have the right to decrease return on equity.D. Bond payments can be burdensome as soon as earnings and also cash circulation are low.E. All of the over.
The party that has actually the right to exercise the call choice on callable bonds is(are):A. The bond issuer.B. The bondholders.C. The bond underwriter.D. The bond indenture.E. The bond trustee.
The contract price of interest is additionally called the:A. Nominal rate.B. Stated rate.C. Coupon rate.D. Each of A, B, and C.E. Market price.
Bonds have the right to be issued:A. At par.B. At a premium.C. At a discount.D. Between interest payment days.E. All of the above.
When a bond sells at a premium:A. The contract price is above the industry price.B. The contract price is equal to the sector price.C. The contract rate is listed below the industry rate.D. It implies that the bond is a zero coupon bond.E. The bond pays no interest.
A bond sells at a discount as soon as the:A. Contract rate is above the market price.B. Contract rate is equal to the market rate.C. Contract price is below the sector price.D. Bond has actually a temporary life.E. Bond pays interest only when a year.
Amortizing a bond discount:A. Decreases interest expense each period.B. Increases the sector worth of the Bonds Payable.C. Allocates a part of the total discount to each interemainder duration.D. Increases cash flows from the bond.E. Decreases the Bond Payable account.
The Discount on Bond Payable account is:A. A liablility.B. An expense.C. A contra price.D. A contra equity.E. A contra liablility.
A discount on bonds payable:A. Decreases the total bond interest price.B. Is not allowed in many type of states to protect creditors.C. Increases the Bond Payable account.D. Occurs when a agency issues bonds through a contract price much less than the sector price.E. Occurs when a agency concerns bonds via a contract price even more than the sector price.
A agency might not retire bonds by:A. Exercising a call alternative.B. The holders converting them to stock.C. Purchasing the bonds on the open up market.D. Paying them off at maturity.E. All of the above.
Bonds that give the issuer and choice of retiring them before they mature are:A. Serial bondsB. Sinking money bonds.C. Registered bonds.D. Debentures.E. Callable bonds.
Bonds via a par value of less than $1,000 are well-known as:A. Baby bonds.B. Unsecured bonds.C. Convertible bonds.D. Junk bonds.E. Callable bonds.
To carry out protection to creditors and also to reduct interemainder cost, bonds and notes payable have the right to be secured by:A. Debentures.B. The FASB.C. Morgperiods.D. Equity.E. Safe deposit boxes.
The Contract in between the bond issuer and the bondholders, which identifies the rights and obligations of the parties, is referred to as a(n):A. Mortgage contract.B. Mortgage.C. Debenture.D. Installment note.E. Bond indenture.
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A company must repay the financial institution $10,000 cash in 3 years for a loan it gotten in right into. The lean is at 8% interest compounded yearly. The persent out worth element for 3 years at 8% is 0.7938. The percent worth of the loan is:A. $10,000.B. $7,938.C. $12,400.D. $7,600.E. $9,200.