Name : _____________________________

Section : ____________________________

Date : _______________________________
Course & Year : _______________________

ACCOUNTING 3 & 4 FUNDAMENTALS OF ACCOUNTING II

QUIZ
I.

Multiple Choice. Choose the best answer.

1. One of the advantages of the corporation form of business as opposed to a
partnership form is the ease of transferring __________.
a. Assets
c. Ownership
b. Income
d. Salary
2. At a corporation, Assets minus Liabilities is __________.
a. Owners Equity
c. Capital Stock
b. Stockholders Equity
d. Retained Earnings
3. Shares of stock that have been issued and have not been reacquired by the issuing
corporation are called __________ shares.
a. Outstanding
c. Unissued
b. Issued
d. Treasury
4. If a corporation has issued only one type of stock, it is __________ stock.
a. Preferred
c. Treasury
b. Common
d. Outstanding
5. The type of stock that gets its dividend before the common stock gets its dividend is
called __________ stock.
a. Preferred
c. Treasury
b. Common
d. Outstanding
6. The holders of __________ stock elect the corporation's board of directors.
a. Preferred
c. Treasury
b. Common
d. Outstanding
7. The par value of __________ stock usually has no economic significance.
a. Preferred
c. Treasury
b. Common
d. Outstanding
8. The dividend on preferred stock is often expressed as a percentage. To calculate the
annual dividend on preferred stock, you multiply the percentage times the __________
of the preferred stock.
a. Fair Market Value
c. Par Value
b. Net Realizable Value
d. Dividend
9. If a corporation issues 10% Preferred Stock $100 Par on a day when the financial
markets demand 9%, this corporation's 10% Preferred Stock will sell for __________ its
par value.
a. More than
c. Equal to
b. Less than
d. None of the above
10. If a common stock does not have a par value or a stated value, the entire proceeds
from issuing the stock is credited to one account entitled __________.
a. Preferred Stock
c. Retained Earnings
b. Common Stock
d. Share Premium
11. Stockholder's equity is subdivided into two major sections: __________ and __________.
a. Paid in Capital, Retained Earnings
c. Subscribed Capital stock,
Retained Earnings
b. Paid in Capital, Treasury shares
d. Retained Earnings, Treasury
shares
12. The net income of a corporation is closed to the __________ account.
a. Income Summary
c. Retained Earnings
b. Treasury Shares
d. Income Statement
13. Dividends declared by a corporation reduce the __________ section of stockholders'
equity.
a. Income Summary
c. Retained Earnings
b. Treasury Shares
d. Share Premium
14. The __________ date is the date on which the corporation records a liability for its
quarterly dividend.
a. Declaration
c. Payment
b. Record
d. Memorandum
15. The __________ date determines which stockholders will receive a declared dividend.
a. Declaration
c. Payment
b. Record
d. Memorandum
16. If a corporation declares a small stock dividend, the account that will be reduced by a
debit entry is __________.
a. Income Summary
c. Retained Earnings
b. Treasury Shares
d. Share Premium

17. A stockholder will have the same number of shares after a 3-for-2 stock split or after
a __________% stock dividend.
a. 30%
c. 80%
b. 50%
d. 100%
18. A corporation's own shares of stock that have been reacquired from its stockholders
but have not been retired are called __________.
a. Income Summary
c. Retained Earnings
b. Treasury Stock
d. Income Statement
19. The account, Treasury Stock, will have either a zero balance or a __________ balance.
a. Debit
c. Either Debit or Credit
b. Credit
d. None of the above
20. If a share of treasury stock is sold for more than its cost, the difference is credited to
__________.
a. Paid in Capital from treasury stock
c. Common Stock
b. Retained Earnings
d. Cash
21. If preferred stockholders have the opportunity to receive more than the stated
dividend percentage, the stock is described as __________ preferred stock.
a. Participating
c. cumulative
b. Non-participating
d. non-cumulative
22. Dividends in arrears occur only on __________ preferred stock.
a. Participating
c. cumulative
b. Non-participating
d. non-cumulative
23. Dividends in arrears are reported in the financial statements in the __________.
a. Notes or footnotes
c. Income Statement
b. Balance Sheet
d. Dividend Statement
24. If a preferred stock can be exchanged for a stated number of common shares, it is
referred to as __________ preferred stock.
a. Convertible
c. Participating
b. Non-convertible
d. Non-participating
25. The book value per share of preferred stock is its __________ plus any dividends in
__________.
a. Call price, payable
c. Stated value, arrears
b. Call price, arrears
d. Stated value, payable
26. Earnings per share means earnings per share of __________.
a. Preferred Stock
c. Retained Earnings
b. Common Stock
d. Share Premium
27. A debit balance in Retained Earnings will appear in stockholders' equity as __________.
a. Accumulated Retained Earnings
c. Net loss
b. Accumulated Deficit
d. Share discount
28. The __________ of a corporation declares the dividends.
a. Managers
c. Accountants (CPA)
b. Board of Directors
d. Stockholders
29. When a small stock dividend is declared, the __________ value of the new shares is
transferred from Retained Earnings to paid-in capital accounts.
a. Par
c. Stated
b. Market
d. Realizable
30. A separate portion of stockholders' equity that reports certain gains and losses on
hedges, foreign currency translations, and pension liabilities that were not part of net
income shown on the income statement is __________.
a. Retained Earnings
c. Unearned Revenue
b. Interest Income
d. Other Comprehensive Income

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