Which of the following statements about stockholders' equity is not correct? Group of answer choices a)Stockholders' equity is the shareholders' residual interest in the company resulting from the difference in assets and liabilities. b)Stockholders' equity accounts are increased with credits. c)Stockholders' equity results only from contributions of the

Which of the following statements about stockholders' equity is not correct? Group of answer choices a)Stockholders' equity is the shareholders' residual interest in the company resulting from the difference in assets and liabilities. b)Stockholders' equity accounts are increased with credits. c)Stockholders' equity results only from contributions of the

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.
Effects of transactions on stockholders’ equity Indicate whether each of the following types of transactions will (a) increase stockholders’ equity or (b) decrease stockholders’ equity. a. Issued common stock for cash. l. Received cash for fees earned. c. Paid cash for utilities expense. d. Paid cash for rent expense. e. Paid cash dividends.
d. (1) What are the two primary ways companies raise common equity? (2) Why is there a cost associated with reinvested earnings? (3) Jana doesnt plan to issue new shares of common stock. Using the CAPM approach, what is Janas estimated cost of equity?
What would be the impact on the accounting equation when a company acquires treasury stock? Increase assets and increase stockholders' equity. Decrease assets and decrease stockholders' equity. Decrease assets and increase stockholders' equity. No effect on the accounting equation.
Which of the following statements are false? (you may choose more than one statement) A The issue of ordinary shares will not dilute ownership of the company B A rights issue will not dilute ownership of the company C A bonus issue is a means of raising finance for the business D A company can decide on the level of dividends they pay out to ordinary shareholders each year
Indicate whether the following statements are (True) or (False) and correct the false statements: The financial manager prepares financial statements that recognize revenue at the point of sale and expenses when incurred. Capital markets are for investors who want a safe temporary place to deposit funds where they can earn interest and for borrowers who have a short term need for funds. Common stock dividends paid to stockholders are equal to the earnings available for common stockholders divided by the number of shares of common stock outstanding.
Which statement regarding dividends is false?a. Dividends represent a sharing of corporate profits withowners.b. Both stock and cash dividends reduce retained earnings.c. Cash dividends paid to stockholders reduce net income.d. None of the above statements are false.
The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
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.
Which of the following statements about stockholders' equity is not true? Select one: Stockholders' equity may be increased or decreased by Accumulated Other Comprehensive Income. Stockholders' equity is decreased by Treasury Stock. Stockholders' equity is decreased by a deficit in Retained Earnings. Stockholders' equity is increased by Additional Paid in Capital.
The balance sheet identity refers to the fact that A.) Current Assets and Current Liabilities must be equal to each other. B.) Shareholders equity in the current year must equal shareholders equity in prior year plus net income from the current year that is not being paid out as dividends or used to repurchase stock. C.) Assets must equal Liabilities plus Shareholders' Equity. D.) Net Property Plant and Equipment must equal Gross Property Plant and Equipment minus Accumulated Depreciation. E.) Shareholders equity can never be negative.
Which of the following is false regarding the balance sheet? Group of answer choices The accounts shown on the balance sheet represent the basic accounting equation for a particular business entity The balance sheet reports the changes in specific account balances over a period of time The balance sheet reports the amount of assets, liabilities and stockholders’ equity as of a point in time. The retained earnings on the balance sheet must agree with the ending retained earnings balance shown on the statement of stockholders’ equity