Question Details

The return on common stockholders' equity is computed 



1.	Retained earnings is increased by each of the following except
a.	net income.
b.	prior period adjustments.
c.	some disposals of treasury stock.
d.	All of these increase retained earnings.

2.	A prior period adjustment for understatement of net income will
a.	be credited to the Retained Earnings account.
b.	be debited to the Retained Earnings account.
c.	show as a gain on the current year's Income Statement.
d.	show as an asset on the current year's Balance Sheet.

	3.	The retained earnings statement
a.	is the owners' equity statement for a corporation.
b.	will show an addition to the beginning retained earnings balance for an understatement of net income in a prior year.
c.	will not reflect net losses.
d.	will, in some cases, fail to reconcile the beginning and ending retained earnings balances.

	4.	In the stockholders' equity section of the balance sheet,
a.	Common Stock Dividends Distributable will be classified as part of additional paid-in capital.
b.	Common Stock Dividends Distributable will appear in its own subsection of the stock- holders' equity.
c.	Additional Paid-in Capital appears under the subsection Paid-in Capital.
d.	Dividends in arrears will appear as a restriction of Retained Earnings.

5.	The return on common stockholders' equity is computed by dividing net income available to common stockholders by
a.	ending total stockholders' equity.
b.	ending common stockholders' equity.
c.	average total stockholders' equity.
d.	average common stockholders' equity.




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