D. Net income divided by the number of shares authorized.
32. 11-44. The net assets of a corporation are equal to: A. Total assets - total liabilities.
B. Total assets - retained earnings.
C. Total assets + total liabilities.
D. Total assets + retained earnings.
33. 11-46. When shares of stock are sold from one investor to another they will trade at: A. Par value.
B. Book value.
C. Market value.
D. Stated Value.
34. 11-49. Which of the following is not a characteristic of the corporate form of organization? A. The owners of a corporation cannot lose more than the amount of their investment. B. Shares of stock in a corporation are more readily transferable than is an interest in a partnership. C. Stockholders have authority to decide by majority vote the amount of dividends to be paid. D. The corporation is a very efficient vehicle for obtaining large amounts of capital required for large-scale production.
35. 11-52. 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.
36. 11-53. 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.
37. 11-54. 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.
38. 11-62. 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.
39. 11-65. 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.
40. 11-71. When a corporation issues capital stock at a price higher than the par value: A. The amount received over par value increases retained earnings. B. The entire issue price is credited to the Capital Stock account. C. The amount received in excess of par value constitutes profit to the issuing corporation. D. The amount received in excess of par value becomes part of paid-in capital.
41. 11-77. Treasury stock:
A. Is an asset.
B. Increases total stockholders' equity.
C. Decreases total stockholders' equity.
D. Does not change total stockholders' equity.
42. 11-83. Stock that had been issued by a corporation and later reacquired is classified as: A. Treasury stock.
B. Non-participating preferred stock.
C. Restricted stock.
D. Issued shares.
43. 11-88. Zigma Corporation is authorized to issue 2,000,000 shares of $4 par value capital stock. The corporation issued half the stock for cash at $8 per share, earned $336,000 during the first three months of operation, and declared a cash dividend of $60,000. The total paid-in capital of Zigma Corporation after three months of operation is: A. $7,940,000.
1,000,000 x $8 = $8,000,000
44. 11-89. Thurman Corporation issued 450,000 shares of $.50 par value capital stock at its...