ACC 291 Week 4 Practice Quiz
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Practice Question 01
The stockholders of a corporation have unlimited liability.
Practice Question 05
Which of the following is a disadvantage of the corporate business form?
|No income taxes|
|Easy acquisition of capital|
Practice Question 10
If a corporation issues 1,000 shares of $3 par common stock for $7 a share, how much is the legal capital?
Practice Question 20
For what reason might a company acquire treasury stock?
|To increase the number of shares of stock outstanding|
|To reissue the shares to officers and employees under bonus and stock compensation plans|
|To signal to the stock market that management believes the stock is overpriced|
|To increase profit|
Practice Question 30
Which one of the following is not a right of preferred stockholders?
|Priority to the assets in the event of liquidation|
|Priority in relation to dividends|
|Priority voting rights|
|Priority to dividends and assets in liquidation.|
Practice Question 59
If everything else is held constant, what will cause earnings per share to increase?
|The purchase of treasury stock|
|The payment of a cash dividend to preferred stockholders|
|The issuance of new shares common stock|
|The payment of a cash dividend to common stockholders|
Practice Question 56
Which of the following does not increase the return on common stockholders’ equity?
|An increase in the return on assets ratio|
|An increase in the use of debt financing|
|An increase in the company’s stock price|
|An increase in the company’s net income|
Practice Question 60
When a stock dividend is declared, which of the following accounts is debited?
|Common Stock Dividends Distributable|
|Paid-in Capital in Excess of Par Value|
Practice Question 55
Jaylo Inc. had net income of $500,000, net sales of $10,000,000 and paid cash dividends of $200,000 to the common stockholders. How much is Jaylo’s payout ratio?
Practice Question 54
Consider the following data for a corporation:
|Preferred stock dividends||$50,000|
|Market price per share of stock||$25|
|Average common stockholders’ equity||$4,000,000|
|Cash dividends declared on common stock||$20,000|
What is the return on common stockholders’ equity?