1. With regard to cash dividends paid by a corporation,

| October 14, 2019

1. With regard to cash dividends paid by a corporation, on which date is the dividend recorded as a liability on the balance sheet?

A. Date of declaration

B. Date of record

C. Date of payment

D. All of the above

E. None of the above

2. Which type of preferred stock may be “cashed in” at the option of the company (issuer), usually based on a predetermined price and after a predetermined period of time has elapsed?

A. Callable preferred stock

B. Convertible preferred stock

C. Redeemable preferred stock

D. Exchangeable preferred stock

E. None of the above

3. Which of the following types of preferred stock is reported in the “mezzanine” section of the balance sheet (per US GAAP)?

A. Callable preferred stock

B. Convertible preferred stock

C. Redeemable preferred stock

D. Mandatorily redeemable preferred stock

E. None of the above

4. A corporation purchased 100,000 shares of its own stock for $50 per share and then reissues 25,000 of these shares for $48 per share. What is the amount of loss recognized in the income statement from the sale of the stock?

A. $0

B. $2

C. $50,000

D. $200,000

E. Amount cannot be calculated without further information

5. Company A has 500,000 shares of stock outstanding and declares a 20% stock dividend. Which of the following is false?

A. There is no change in the proportion of the company that each stockholder owns

B. The number of shares outstanding will be 600,000 after the dividend is paid

C. Par value of the shares at the time of the dividend will be used to determine the dollar value of the dividend

D. Retained earnings is reduced by the amount of the dividend

E. None of the above

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