For large publicly listed and traded companies, which of the following should not be done as a step in gathering evidence concerning the company's capital stock account: a. Analysis of capital stock accounts b. Confirmation of Shares issued to existing stockholders c. Accounting for the proceeds of major stock issues d. Reconciliation of stock certificate book with the general ledger

For large publicly listed and traded companies, which of the following should not be done as a step in gathering evidence concerning the company's capital stock account: a. Analysis of capital stock accounts b. Confirmation of Shares issued to existing stockholders c. Accounting for the proceeds of major stock issues d. Reconciliation of stock certificate book with the general ledger

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 14MCQ

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Similar questions

Which of the following statements is true? The outstanding number of shares is the maximum number of shares that can be issued by a corporation. The shares that are in the hands of the stockholders are said to be outstanding. It is very unlikely that corporations will have more than one class of stock outstanding. Preferred stock is stock that has been retired.
Which of the following audit procedures would not likely be performed for audits of shareholders’ equity?a. Read board of directors’ minutes for authorization of equity transactions.b. Confirm outstanding common and preferred stock with stock registrar.c. Compare valuation of stock to published market prices.d. Obtain management representation about number of shares issued and outstanding.
When a client company does not maintain its own capital stock records, the auditors should obtain written confirmation from the transfer agent and registrar concerninga. Restrictions on the payment of dividends.b. The number of shares issued and outstanding.c. Guarantees of preferred stock liquidation value.d. The number of shares subject to agreements to repurchase.
a. Which of the following disclosures regarding stock is not required to be reported on the balance sheet or in the notes to the financial statements? the par value and the number of shares authorized, issued, and outstanding. preferred stock characteristics, including dividend rate. any dividends in arrears. a list of names of stockholders.
Which of the following statements is incorrect? Issued shares of stocks include those that have been at one time been sold to the public and which have been subsequently retired. If an entity’s capital stock is retired, the Share Capital account is reduced by its par value, the number of shares is reduced by the stock retired and the treasury stock is credited at cost. Treasury shares may be reissued as dividends, in which case the cost of the shares should be charged to Retained Earnings. Though may be used in computing for the Share Capital, stated value is not similar to par value of stock.
Which of the following is the most important audit consideration when examining the stockholders’ equity section of a client’s balance sheet?a. Changes in the capital stock account are verified by an independent stock transfer agent.b. Stock dividends and stock splits during the year under audit were approved by the stockholders.c. Stock dividends are capitalized at par or stated value on the dividend declaration date.d. Entries in the capital stock account can be traced to resolutions in the minutes of meetings of the board of directors.
The Standard requires every stock corporation to disclose the amount of unrestricted retained earnings equal to the cost of treasury shares, if there is any, but does not compel it to include the number of shares held in the treasury through the notes to financial statements. * a. True b. False
The "Float" of a company's stock represents: Total shares not held by Officers and Directors. Total shares outstanding and available for trading by the public. Total shares outstanding and held by Institutions. The average daily volume of trading in a company's common shares.
Describe the types of shares held by the company. What can you say about the history of company share issues, retained earnings and payment of dividends? Are they following any specific policies for these? (Please correct answer)
.What account should be debited when stock issuance costs are associated with the initial issuance of stock at incorporation? Group of answer choices a. Organization Expense b. Additional Paid-in Capital c. Organization Costs d. Common stock
Earnings per ShareProgresso Corporation, one of the new audit clients, has not reported EPS data in its annual reports to stockholders in the past. The president requested that you furnish information about the reporting of EPS data in the current year’s annual report in accordance with GAAP.Required:a) Define the term earnings per share as it applies to corporation with a capitalization structure composed of only one class of common stock. Then explain how EPS should be computed and how the information should be disclosed in the corporation’s financial statements.b) Discuss the treatment, if any, that should be given to each of the following items in computing EPS for financial statement reporting:i. The declaration of current dividends on cumulative preferred stock.ii. The acquisition of some of the corporation’s outstanding common stockduring the current fiscal year (The stock was classified as treasury stock).iii. A two-for-one stock split of common stock during the current fiscal…
In an audit of stockholders’ equity which among the following is a correct application of generally accepted accounting principles? a. Retired treasury shares are deducted from the shareholders’ equity of the company 2. Subscriptions Receivable are deducted from the share capital account of the company except when they are collectible within one year. 3. Share Warrants Outstanding are included in the share capital account of the company. 4. All share capital transactions are recorded at their respective par values regardless of the prevailing market value of each share of stock.