Chapter 13 Test-TaNisha
1.
Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is referred to as:
A) Participating preferred stock.
B) Callable preferred stock.
C) Cumulative preferred stock.

D) Convertible preferred stock. E) Noncumulative preferred stock.

| | Correct Answer(s): | E |

2.
Book value per common share is computed by:
A) Multiplying the number of common shares outstanding times the market price per common share.
B) Dividing total assets by the number of shares outstanding.
C) Dividing stockholders' equity applicable to common shares by the number of common shares outstanding.
D) Multiplying the number of common shares outstanding by par value per share.
E) Dividing the number of common shares outstanding by stockholders' equity applicable to common shares.

| | Correct Answer(s): | C |

3.
The following data were reported by a corporation:

The number of outstanding shares is:
A) 12,000.
B) 15,000.
C) 17,000.
D) 20,000.
E) 23,000.

| | Correct Answer(s): | A |

4.
Shamrock Company had net income of $30,000. On January 1, the number of shares of common stock outstanding were 8,000. There were no other stock transactions. The company's earnings per share is:
A) $3.75.
B) $3.00.
C) $3.33.
D) $15.00.
E) $3.16.

Feedback:
{$30,000/8,000} = $3.75 | | Correct Answer(s): | A |

5.
Treasury stock is classified as:
A) An asset account.
B) A contra asset account.
C) A revenue account.
D) A contra equity account.
E) A liability account.

| | Correct Answer(s): | D |

6.
A liquidating dividend is:
A) Only declared when a corporation closes down.
B) A return of a part of the original investment back to the stockholders.
C) Not allowed under federal law.
D) Only paid in assets other than cash.