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ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS ques...
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS questions
ch15.doc-CHAPTER 15 STOCKHOLDERS’ E...
ch15.doc-CHAPTER 15 STOCKHOLDERS’ EQUITY IFRS questions
Page 5
Stockholders’ Equity
CHAPTER LEARNING OBJECTIVES
1.
Discuss the characteristics of the corporate form of organization.
2.
Identify the key components of stockholders' equity.
3.
Explain the accounting procedures for issuing shares of stock.
4.
Describe the accounting for treasury stock.
5.
Explain the accounting for and reporting of preferred stock.
6.
Describe the policies used in distributing dividends.
7.
Identify the various forms of dividend distributions.
8.
Explain the accounting for small and large stock dividends, and for stock splits.
9.
Indicate how to present and analyze stockholders’ equity.
*10.
Explain the different types of preferred stock dividends and their effect on book value per
share.
15 - 5
Page 6
Test Bank for Intermediate Accounting, Thirteenth Edition
SUMMARY OF LEARNING OBJECTIVES BY QUESTIONS
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Item
Type
Learning Objective 1
1.
TF
2.
TF
3.
TF
21.
MC
22.
MC
23.
MC
S
24.
MC
Learning Objective 2
4.
TF
S
25.
MC
26.
MC
27.
MC
28.
MC
Learning Objective 3
5.
TF
29.
MC
32.
MC
S
35.
MC
73.
MC
76.
MC
121.
MC
6.
TF
30.
MC
P
33.
MC
71.
MC
74.
MC
77.
MC
131.
E
7.
TF
31.
MC
S
34.
MC
72.
MC
75.
MC
120.
MC
142.
P
Learning Objective 4
8.
TF
P
37.
MC
41.
MC
80.
MC
84.
MC
123.
MC
134.
E
9.
TF
38.
MC
42.
MC
81.
MC
85.
MC
124.
MC
135.
E
10.
TF
39.
MC
78.
MC
82.
MC
86.
MC
132.
E
143.
P
S
36.
MC
40.
MC
79.
MC
83.
MC
122.
MC
133.
E
Learning Objective 5
11.
TF
43.
MC
P
45.
MC
87.
MC
89.
MC
12.
TF
44.
MC
S
46.
MC
88.
MC
Learning Objective 6
13.
TF
14.
TF
Learning Objective 7
15.
TF
48.
MC
51.
MC
54.
MC
91.
MC
94.
MC
136.
E
16.
TF
49.
MC
52.
MC
55.
MC
92.
MC
125.
MC
144.
P
47.
MC
50.
MC
53.
MC
90.
MC
93.
MC
126.
MC
145.
P
Learning Objective 8
17.
TF
59.
MC
96.
MC
101.
MC
106.
MC
129.
MC
18.
TF
60.
MC
97.
MC
102.
MC
107.
MC
137.
E
56.
MC
61.
MC
98.
MC
103.
MC
108.
MC
138.
E
57.
MC
62.
MC
99.
MC
104.
MC
127.
MC
144.
P
58.
MC
95.
MC
100.
MC
105.
MC
128.
MC
145.
P
Learning Objective 9
19.
TF
63.
MC
65.
MC
P
67.
MC
110.
MC
112.
MC
114.
MC
20.
TF
64.
MC
66.
MC
109.
MC
111.
MC
113.
MC
139.
E
Learning Objective *10
68.
MC
70.
MC
116.
MC
118.
MC
130.
MC
141.
E
69.
MC
115.
MC
117.
MC
119.
MC
140.
E
146.
P
Note:
TF = True-False
MC = Multiple Choice
E = Exercise
P = Problem
15 - 6
Page 7
Stockholders’ Equity
TRUE-FALSE
—Conceptual
1.
A corporation is incorporated in only one state regardless of the number of states in which
it operates.
2.
The preemptive right allows stockholders the right to vote for directors of the company.
3.
Common stock is the residual corporate interest that bears the ultimate risks of loss.
4.
Earned capital consists of additional paid-in capital and retained earnings.
5.
True no-par stock should be carried in the accounts at issue price without any additional
paid-in capital reported.
6.
Companies allocate the proceeds received from a lump-sum sale of securities based on
the securities’ par values.
7.
Companies should record stock issued for services or noncash property at either the fair
value of the stock issued or the fair value of the consideration received.
8.
Treasury stock is a company’s own stock that has been reacquired and retired.
9.
The cost method records all transactions in treasury shares at their cost and reports the
treasury stock as a deduction from capital stock.
10.
When a corporation sells treasury stock below its cost, it usually debits the difference
between cost and selling price to Paid-in Capital from Treasury Stock.
11.
Participating preferred stock requires that if a company fails to pay a dividend in any year,
it must make it up in a later year before paying any common dividends.
12.
Callable preferred stock permits the corporation at its option to redeem the outstanding
preferred shares at stipulated prices.
13.
The laws of some states require that corporations restrict their legal capital from
distribution to stockholders.
14.
The SEC requires companies to disclose their dividend policy in their annual report.
15.
All dividends, except for liquidating dividends, reduce the total stockholders’ equity of a
corporation.
16.
Dividends payable in assets of the corporation other than cash are called property
dividends or dividends in kind.
17.
When a stock dividend is less than 20-25 percent of the common stock outstanding, a
company is required to transfer the fair value of the stock issued from retained earnings.
18.
Stock splits and large stock dividends have the same effect on a company’s retained
earnings and total stockholders’ equity.
15 - 7
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