Which of the following is false? a. Under GAAP, companies cannot record gains on transactions involving their own shares. b. Under IFRS, companies cannot record gains on transactions involving their own shares. c. Under IFRS, the statement of stockholders’ equity is a required statement. d. Under IFRS, a company records a revaluation surplus when it experiences an increase in the price of its common stock.

Which of the following is false? a. Under GAAP, companies cannot record gains on transactions involving their own shares. b. Under IFRS, companies cannot record gains on transactions involving their own shares. c. Under IFRS, the statement of stockholders’ equity is a required statement. d. Under IFRS, a company records a revaluation surplus when it experiences an increase in the price of its common stock.

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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Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
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 False in regards to Share premium account? a. It will be shown under the shareholders equity b. It will be collected when the issue price is more than the par value of shares c. It will be collected when the par value of share is more than the issue price d. It will not be shown under current assets in the balance sheeting
Which of the following statements is false? a. the common stock account has a credit balance. b. the additional paid-in capital account has a credit balance. c. common stock may be issued for more than par value. d. the par value of common stock represents the stock's market value.
If a company resells treasury stock at a loss, and that amount exceeds any balance in the treasury stock APIC account, the remaining loss is debited to: Group of answer choices Additional Paid in Capital (APIC) -Common Stock Treasury stock cannot be sold at a loss Retained earnings Loss on sale of treasury stock
WHICH STATEMENT IS FALSE?A. If the net income of prior period is overstated because of the change in accounting policy, the effect is deducted from the beginning retained earnings.B. Equity is also the net assets.C. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of the prior period is overstated, the amount of the error uis deducted from retained earnings.D. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
why is this statement false? Small and large stock dividends have no effect on the Common Stock account.
Why would a company choose to not pay dividends on its common stock?
Which of the following statements is false regarding diluted earnings per share? Reporting diluted earnings per share is required by GAAP when potentially significant dilution of EPS exists. Diluted earnings per share can be used to reflect the extent of potential share dilution. Diluted earnings per share is not reported by some companies. Diluted earnings per share is always the same as basic earnings per share.
Which statement regarding treasury stock is false?a. Treasury stock is considered to be issued but notoutstanding.b. Treasury stock has no voting, dividend, or liquidationrights.c. Treasury stock reduces total stockholders’ equity onthe balance sheet.d. None of the above are false.
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.
What does it mean when a company has zero net income but its stock price has increased? How do you recognize the change under the equity method?