statements correctly relate to ordinary shares? i) They represent an ownership interest. ii) Ordinary equity holders are the first to have their claims met in the event of the company going into administration. iii) As dividends are the return to the shareholders, they are paid out of operating profits before tax. iv) Control rights often differ between ordinary and other classes of share.

statements correctly relate to ordinary shares? i) They represent an ownership interest. ii) Ordinary equity holders are the first to have their claims met in the event of the company going into administration. iii) As dividends are the return to the shareholders, they are paid out of operating profits before tax. iv) Control rights often differ between ordinary and other classes of share.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 14MC: Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a...

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Issued stock is defined as stock that ________. A. is available for sale B. that is held by the corporation C. has been sold to investors D. has no voting rights
How does a stock split affect the balance sheet of a corporation?
Which of the following is NOT a characteristic of an ordinary share? a) The dividends are at the discretion of directors b) They give voting rights at meetings c) They are irredeemable d) Interest is accrued if the dividend is not paid
Which account cannot be used if a corporation has only one class of shares? a. Preference shares b. Ordinary shares c. Share Capital d. Accumulated profits
Which of the following statement is false in regards to Share premium? a. It will be shown under equity section in the balance sheet b. It will be credited at the time of issue of new shares along with premium c. It cannot be distributed as dividend to the shareholders d. It can be distributed as dividend to the shareholders
Identify which category of shareholder's equity is affected by each item and briefly explain how it is affected. Restricted retained earnings by making an entry equal to the cost of treasury shares purchased.
Which of the following affects the total Shareholders’ Equity? a. Declaration of a scrip dividend b. Declaration of share split c. Appropriation of retained earnings d. Retirement of treasury shares
Transaction costs incurred by the corporation relating to issue of shares may not be a. Charged against the related share premium b. Charged to an expense account c. Written off directly against share capital d. Taken to profit or loss
Which of the following is not a characteristic of the commonstock of a large, publicly owned corporation?a. The shares may be transferred from one investor toanother without disrupting the continuity of businessoperations.b. Voting rights in the election of the board of directors.c. A cumulative right to receive dividends. d. After issuance, the market value of the stock is unre-lated to its par value.
Answer the follow: Explain the corporate characteristic termed “no mutual agency" Explain the corporate characteristic termed limited liability. Explain the term outstanding stock. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? Is it true or false that all forms and classes of stock carry voting rights? Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the income statement?
Explain the corporate characteristic termed “no mutual agency” Explain the corporate characteristic termed limited liability. Explain the term outstanding stock. Is it true or false that corporations muse issue common stock, but may or may not decide to issue preferred stock? Is it true or false that all forms and classes of stock carry voting rights? Is it true of false that stock sold for amounts in excess of par value results in a gain reported on the income statement?
Choose the incorrect statement below: A. Retained earnings are the funds contributed by shareholders in excess of par or stated value.B. Equity is defined as the residual interest in the assets of an entity after deducting all of the liabilities.C. Conversion of preference shares into ordinary shares directly affects retained earnings.D. The statement of changes in equity is a formal statement that shows the movements in the elements or components of the shareholders' equity.