Financial Accounting-w/cd-package
3rd Edition
ISBN: 9780131060876
Author: REIMERS
Publisher: PEARSON
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Chapter 8, Problem 5MCQ
To determine
Describe the effect of purchase of
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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.
Choose the correct answer:
Equity security acquired for non-trading and the shares are not enough to warrant significant influence should be measured at the end of the period
a. cost, being the purchase price
b. cost, being the purchase price plus transaction costs
c. fair value, with change in FV taken through profit or loss.
d. fair value, with change in FV taken through other comprehensive income
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
Chapter 8 Solutions
Financial Accounting-w/cd-package
Ch. 8 - Prob. 1YTCh. 8 - Prob. 2YTCh. 8 - Prob. 3YTCh. 8 - Prob. 4YTCh. 8 - 1. Compare a stock split and a stock dividend. 2....Ch. 8 - Prob. 6YTCh. 8 - Prob. 1QCh. 8 - Prob. 2QCh. 8 - Prob. 3QCh. 8 - Prob. 4Q
Ch. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Prob. 8QCh. 8 - Prob. 9QCh. 8 - Prob. 10QCh. 8 - Prob. 11QCh. 8 - Would treasury stock be considered authorized,...Ch. 8 - Prob. 13QCh. 8 - Prob. 14QCh. 8 - Prob. 15QCh. 8 - What are the two sections of the shareholders...Ch. 8 - Prob. 17QCh. 8 - Prob. 18QCh. 8 - Prob. 19QCh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Treasury stock is a. a companys own stock that it...Ch. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - The number of shares of stock designated as issued...Ch. 8 - Prob. 8MCQCh. 8 - Prob. 9MCQCh. 8 - Prob. 10MCQCh. 8 - Prob. 1SEACh. 8 - Prob. 2SEACh. 8 - Prob. 3SEACh. 8 - Prob. 4SEACh. 8 - Prob. 5SEACh. 8 - Prob. 6SEACh. 8 - Prob. 7SEACh. 8 - Prob. 8SEACh. 8 - Prob. 9SEACh. 8 - Calculate retained earnings balance. (LO 5)....Ch. 8 - Prob. 11SEACh. 8 - Prob. 12SEBCh. 8 - Prob. 13SEBCh. 8 - Prob. 14SEBCh. 8 - Prob. 15SEBCh. 8 - Prob. 16SEBCh. 8 - Prob. 17SEBCh. 8 - Prob. 18SEBCh. 8 - Prob. 19SEBCh. 8 - Prob. 20SEBCh. 8 - Prob. 21SEBCh. 8 - Prob. 22SEBCh. 8 - Prob. 23EACh. 8 - Prob. 24EACh. 8 - Prob. 25EACh. 8 - Prob. 26EACh. 8 - Prob. 27EACh. 8 - Prob. 28EACh. 8 - Prob. 29EACh. 8 - Prob. 30EACh. 8 - Prob. 31EACh. 8 - Analyze equity accounts. (LO 1, 2, 3, 5). The...Ch. 8 - Prob. 33EACh. 8 - Prob. 34EACh. 8 - Prob. 35EACh. 8 - Prob. 36EACh. 8 - Prob. 37EACh. 8 - Prob. 38EACh. 8 - Prob. 39EBCh. 8 - Prob. 40EBCh. 8 - Prob. 41EBCh. 8 - Prob. 42EBCh. 8 - Prob. 43EBCh. 8 - Prob. 44EBCh. 8 - Prob. 45EBCh. 8 - Prob. 46EBCh. 8 - Prob. 47EBCh. 8 - Prob. 48EBCh. 8 - Prob. 49EBCh. 8 - Prob. 50EBCh. 8 - Prob. 51EBCh. 8 - Prob. 52EBCh. 8 - Prob. 53EBCh. 8 - Prob. 54EBCh. 8 - Prob. 55PACh. 8 - Prob. 56PACh. 8 - Prob. 57PACh. 8 - Prob. 58PACh. 8 - Prob. 59PACh. 8 - Prob. 60PACh. 8 - Prob. 61PACh. 8 - Prob. 62PACh. 8 - Prob. 63PBCh. 8 - Prob. 64PBCh. 8 - Prob. 65PBCh. 8 - Prob. 66PBCh. 8 - Prob. 67PBCh. 8 - Prob. 68PBCh. 8 - Prob. 69PBCh. 8 - Prob. 70PBCh. 8 - Prob. 1FSACh. 8 - Prob. 2FSACh. 8 - Prob. 3FSACh. 8 - Prob. 1CTPCh. 8 - Prob. 2CTPCh. 8 - Prob. 1IECh. 8 - Prob. 2IECh. 8 - Prob. 3IECh. 8 - Prob. 4IECh. 8 - Prob. 5IE
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- Explain how the Du Pont system of analysis breaks down return on assets. Also explain how it breaks down return on stockholders’ equity.arrow_forwardWhich of the following statements is not correct? Group of answer choices A)Purchasing fixed assets using cash decreases the current ratio. B)Accruing a commission expense will affect the net profit margin ratio. C)Increasing the financial leverage ratio guarantees the net profit margin ratio will increase. D)Purchasing treasury stock results in a decrease in the current ratio. E)All of the above are correctarrow_forwardFinancial risk is the additional risk that stockholders face as a result of using debt, as opposed to the risk they would face if no debt was used. * O Correct Wrongarrow_forward
- Which of the following statements is false? A. Mutual funds are pool investor funds to purchase financial instruments and thus reduce risks through diversification. B. Initial public offering (IPO) occurs when firm issues stock in the public market for the first time. C. The difference between current assets and non-current assets equals to working capital. D. Owner’s equity is the residual interest in assets that remains after subtracting an entity’s liabilities.arrow_forwardWhich of the following is not a defining feature of common stock? a residual claim on assets voting rights a residual claim on cash flows a fixed returnarrow_forwardOne of the following decisions is not taken to increase the stock price: Select one: a. Maximize costs b. Attracting additional funds c. Maximize net income or profit d. Returning profits to owners over timearrow_forward
- For the transaction of the purchase of common stock, why are we debiting cash and crediting the common stock? Would you not reverse this transaction, if so the retained earnings are also incorrect.arrow_forwardPro forma statements: Multiple Choice must assume that no new equity is issued. must assume that no dividends will be paid. exclude net working capital needs. are projections, not guarantees. are limited to a balance sheet and income statement.arrow_forwardowners equity are capital, retained earnings and other reservations. True Falsearrow_forward
- The purchase of treasury shares would have the following effects: a. Assets - decrease; Equity - increase; Shares issued - decrease; Shares outstanding - decrease b. Assets - decrease; Equity - decrease; Shares issued - decrease; Shares outstanding - decrease c. Assets - decrease; Equity - decrease; Shares issued - no effect; Shares outstanding - decrease d. Assets - increase; Equity - decrease; Shares issued - no effect; Shares outstanding - decreasearrow_forwardWhich of the below statements is false for equity? A. Limited liability B.Residual claim on firm value C.Payouts to equity holders must be made before interest payments D.Voting Rightsarrow_forwardFunds needed for purchase inventory, pay short-term debt, and day-to-day operating expenses are known as Select one: a. Equity share capital b. Fixed capital c. None of the options d. Long term assets e. Preference share capitalarrow_forward
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