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Treasury stock is a contra stockholders' equity account. 1. Treasury stock should not be classified as a current asset. 2. Treasury stock purchased for $25 per share that is reissued at $20 per share, results in a Loss on Sale of Treasury Stock being recognized on the income statement. 3. Treasury stock is a contra stockholders' equity account. 4. The number of common shares outstanding can never be greater than th ...

Other / Other 22 Mar 2016

Return on common stockholders’ equity 1. A detailed stockholders' equity section in the balance sheet will list the names of individuals who are eligible to receive dividends on the date of record. 2. Common Stock Dividends Distributable is shown within the Paid-in Capital subdivision of the stockholders' equity section of the balance sheet. 3. Return on common stockholders’ equity is computed by dividing ne ...

Other / Other 22 Mar 2016

Net income of a corporation should be closed to retained earnings 1. A 10% stock dividend will increase the number of shares outstanding but the book value per share will decrease. 2. A 3-for-1 common stock split will increase total stockholders' equity but reduce the par or stated value per share of common stock. 3. Retained earnings represents the amount of cash available for dividends. 4. Net income of a corpora ...

Other / Other 22 Mar 2016

Stock can be issued only in exchange for cash. 1. A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares. 2. The market value of a corporation's stock is determined by the number of shares that the corporation has been authorized to issue. 3. Stock can be issued only in exchange for cash. 4. The par value of stock ...

Other / Other 22 Mar 2016

A dividend based on paid-in capital is termed a liquidating dividend. 1. Under the cost method, Treasury Stock is debited at the price paid to reacquire the shares, and the same amount is credited to Treasury Stock when the shares are sold. 2. A dividend based on paid-in capital is termed a liquidating dividend. 3. Common Stock Dividends Distributable is reported as additional paid-in capital in the stockholders' equity sec ...

Other / Other 22 Mar 2016

Dividends may be declared and paid in cash or stock. 1. Preferred stockholders generally do not have the right to vote for the board of directors. 2. Dividends in arrears on cumulative preferred stock are considered a liability. 3. Dividends may be declared and paid in cash or stock. 4. Cash dividends are not a liability of the corporation until they are declared by the board of directors. 5. The amount o ...

Other / Other 22 Mar 2016

The par value of common stock must always be equal to its market value 1. A stockholder has the right to vote in the election of the board of directors. 2. A proxy is a legal document that instructs a stockholder’s agent how to vote shares of stock for the stockholder. 3. As soon as a corporation is authorized to issue stock, an accounting journal entry should be made recording the total value of the shares authorize ...

Other / Other 22 Mar 2016

A successful corporation can have a continuous and perpetual life. 1. Book value per share of common stock is the same amount as the market value per share. 2. A successful corporation can have a continuous and perpetual life. 3. Organizational costs are capitalized by debiting an intangible asset entitled Organization Costs. 4. The cash proceeds from issuing par value stock may be equal to or greater than, but n ...

Other / Other 22 Mar 2016

Payment Card Industry Data Security Standard (PCI DSS) 1. Which U.S. law gives law enforcement organizations greater powers to search telephone, e-mail, banking, and other records? a. Patriot Act b. Communications Assistance for Law Enforcement Act c. Federal Information Security Management Act d. Gramm-Leach-Bliley Act 2. The Payment Card Industry Data Security Standard (PCI DSS) requires encryption of credit card in which c ...

Other / Other 21 Mar 2016

the actions of system administrators 1. All of the following methods for destroying data on hard disk drives are sufficient EXCEPT: a. Reformatting b. Degaussing c. Shredding d. Drilling 2. All of the following are valid reasons for backing up data EXCEPT: a. Disaster b. Software bugs that corrupt data c. Replication d. Sabotage 3. An organization’s IT manager is establishing a business relationship with an off ...

Other / Other 21 Mar 2016