LO 14.1Which the the adhering to is not a characteristic the sets wanted stock personal from usual stock?

voting rightsdividend paymentstransferabilityownership

LO 14.1Issued stock is identified as stock the ________.

You are watching: Which of the following is true of a common stock?

is obtainable for salethat is organized by the corporationhas been sold to investorshas no voting rights

LO 14.1Your girlfriend is considering incorporating and also asks for advice. I beg your pardon of the adhering to is not a major concern?

colors for the logowhich state in which to incorporatenumber of share of stock to authorizeselection of the copy, group name

LO 14.1Par value of a stock refers to the ________.

issue price that a stockvalue assigned by the incorporation documentsmaximum selling price that a stockdividend to be paid by the corporation

LO 14.1Which that the adhering to is not among the 5 primary duties of the Securities and also Exchange board of directors (the SEC)?

inform and protect investorsregulate securities lawfacilitate funding formationassure the dividends space paid through corporations

LO 14.1When a C corporation has only one course of share it is referred to as ________.

stated worth stockpar value stockcommon stockpreferred stock

LO 14.1The variety of shares that a corporation’s incorporation documents enables it to market is referred to as ________.

issued stockoutstanding stockcommon stockauthorized stock

LO 14.2The complete amount the cash and also other assets got by a corporation indigenous the shareholder in exchange for the shares is ________.

always same to par valuereferred to as kept earningsalways below its proclaimed valuereferred to as paid-in capital

LO 14.2Stock can be authorize for all except i beg your pardon of the following?

accounts payablestate revenue tax paymentsproperty such as a shipment truckservices provided to the copy, group such together legal fees

LO 14.3A agency issued 40 share of $1 par value usual stock because that $5,000. The newspaper entry to document the transaction would incorporate which of the following?

debit the $4,000 to common stockcredit that $20,000 to typical stockcredit that $40 to common stockdebit that $20,000 to usual stock

LO 14.3A firm issued 30 shares of $.50 par value common stock for $12,000. The credit transaction to extr paid-in capital would be ________.


LO 14.3A corporation issued 100 share of $100 par value preferred stock because that $150 per share. The resulting newspaper entry would include which that the following?

a credit transaction to typical stocka credit transaction to casha debit to paid-in funding in overabundance of desired stocka debit come cash

LO 14.3The day the board of directors votes come declare and also pay a cash dividend is referred to as the:

date of stockholder’s meetingdate the paymentdate that declarationdate the liquidation

LO 14.3Which of the adhering to is true that a share dividend?

It is a liability.The decision to problem a stock dividend stays with shareholders.It walk not affect total equity yet transfers quantities between equity components.It create a cash reserve because that shareholders.

LO 14.4Stockholders’ equity is composed of i beg your pardon of the following?

bonds payableretained earnings and also accounts receivableretained earnings and paid-in capitaldiscounts and also premiums on shortcut payable

LO 14.4Retained income is accurately explained by every except which of the complying with statements?

Retained revenue is the main component the a company’s earned capital.Dividends asserted are included to kept earnings.Net income is included to maintained earnings.Net losses are accumulated in the retained earnings account.

LO 14.4If a company’s board of directors designates a part of revenue for a particular purpose because of legal or contractual obligations, they room designated together ________.

retained earnings payableappropriated kept earningscumulative kept earningsrestricted preserved earnings

LO 14.4Corrections the errors that emerged on a previous period’s gaue won statements are dubbed ________.

restrictionsdeficitsprior period adjustmentsrestatements

LO 14.4Owner’s same represents i m sorry of the following?

the amount of resources the agency has native issuing bondsthe sum of the retained earnings and accounts union account balancesthe total of retained income plus paid-in capitalthe service owner’s/owners’ re-publishing of the company, also known together net precious or network assets

LO 14.5Which that the complying with is a measurement of revenue that to represent the profit prior to interest, taxes, depreciation and amortization space subtracted?

net incomeretained earningsEBITDAEPS

LO 14.5Which that the complying with measures the portion of a corporation’s benefit allocated come each impressive share of typical stock?

retained earningsEPSEBITDANOPAT

LO 14.5The measurement of earnings ide that is composed of a company’s profit from operations after taxed are subtracted is ________.


LO 14.5The correct formula because that the calculation of revenue per share is ________.

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(Net earnings + wanted dividends) / load average typical shares outstandingNet income / weighted average usual shares outstanding(Net revenue – desired dividends) / load average typical shares outstanding(Net revenue – desired dividends) / Treasury shares outstanding

LO 14.5Most experts believe which of the following is true around EPS?

Consistent improvement in EPS year ~ year is the indication of continuous improvement in the company’s earning power.Consistent innovation in EPS year after ~ year is the clues of constant decline in the that company earning power.Consistent innovation in EPS year after year is the indication of fraud within the company.Consistent improvement in EPS year after year is the indication that the company will never ever suffer a year of net loss fairly than net income.