Reference no: EM132468434

Question 1: Which of the following is not a feature of the corporate form of organization?

A) Limited liability.

B) Perpetual existence.

C) Transferability of ownership.

D) None of these.

Question 2: Which of the following statements is true?

A) Preemptive rights make it easy for a corporation to issue additional shares.

B) A corporate entity is typically of unlimited duration.

C) One purpose of a corporation is to avoid "double taxation."

D) A corporation can issue common or preferred stock, but not both.

E) None of these.

Question 3: Which of the following is not a characteristic of the corporate form of organization?

A) The owners of a corporation cannot lose more than the amount of their investment.

B) Shares of stock in a corporation are readily transferable.

C) The company President decides the amount of dividends to be paid.

D) The corporation is an effective vehicle for obtaining large amounts of capital.

E) None of these.

Question 4: Little Bo Beep Corporation issued 5,000 shares of $2 par value common stock. The issue price was $7.50 per share. The entry to record this transaction includes a:

A) debit to Cash for $10,000.

B) debit to Paid-in Capital in Excess of Par for $27,500.

C) debit to Common Stock for $10,000.

D) credit to Gain on Stock $37,500.

E) None of these.

Question 5: Which of the following events is first when a corporation pays a dividend?

A) Declaration.

B) Payment.

C) Ex-dividend.

D) Date of record.

E) None of these.

Question 6: When a payment of a previously declared dividend is paid, it normally has the following effect:

A) a decrease in liabilities.

B) a decrease in working capital.

C) a decrease in stockholders' equity.

D) All of the above.

E) None of these.