Reference no: EM132479796
Question 1. Shareholders of a corporation directly elect
a. the president of the corporation.
b. the board of directors.
c. the controller of the corporation.
d. all of the employees of the corporation.
Question 2. Which of the following is not a shareholder right?
a. To declare dividends
b. To vote for to be board of directors
c. To keep the same percentage ownership when new shares are issued
d. To share in assets upon liquidation
Question 3. The two ways that a corporation can be classified by purpose are
a. general and limited.
b. profit and not-for-profit.
c. federal and provincial.
d. publicly held and privately held.
Question 4. Allen Sutton has invested $800,000 in a privately-held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Sutton stand to lose?
a. Up to his total investment of $800,000.
b. Zero.
c. The $800,000 plus any personal assets the creditors demand.
d. $400,000.
Question 5. Ms. Ritchie sold 100 shares of Tremblant Corporation to Ms. Rowcroft for $1,000. As a result of this transaction,
a. Tremblant Corporation's shareholders' equity did not change.
b. Tremblant Corporation's shareholders' equity increased $1,000.
c. Tremblant Corporation's shareholders' equity decreased $1,000.
d. Ms. Ritchie's equity increased $1,000.
Question 6. Allstate Inc. has 10,000 $5, cumulative preferred shares at December 31, 2010. If the board of directors declares a $40,000 annual dividend in 2010,
a. the company will still owe the preferred shareholders $10,000 and should record a dividend payable in this amount.
b. the company will owe the preferred shareholders nothing further.
c. the $10,000 will be disclosed as dividends in arrears in the notes to the financial statements.
d. the company still has to pay the preferred shareholders $50,000, regardless of what amount was declared.
Question 7. Which of the following Canadian companies have to report under International Financial Reporting Standards?
a. private companies
b. not-for-profit corporations
c. public companies
d. partnerships
Question 8. Which of the following would not be true of a privately held corporation?
a. It is sometimes called a closely held corporation.
b. Its shares are regularly traded on the Toronto Stock Exchange.
c. It does not offer its shares for sale to the general public.
d. It is usually smaller than a publicly held company.
Question 9. A corporate board of directors does not generally
a. select officers.
b. formulate operating policies.
c. declare dividends.
d. execute policy.
Question 10. All of the following are examples of organization costs except
a. legal fees.
b. accounting fees.
c. directors' fees.
d. registration costs.
Question 11. The term residual claim refers to a shareholder's right to
a. receive dividends.
b. share in assets upon liquidation.
c. acquire additional shares when offered.
d. exercise the right to vote.
Question 12. Dividends in arrears
a. are always considered a liability.
b. are a liability when they are declared.
c. are never considered to be a liability.
d. are paid to preferred shareholders only after common shareholders receive their dividends
Question 13. Preferred shares issued with the right of the shareholder to redeem the shares are referred to as
a. callable preferred shares.
b. retractable preferred shares.
c. cumulative preferred shares.
d. convertible preferred shares.
Question 14. Stock dividends and stock splits have the following effects on retained earnings:
Stock Splits Stock Dividends
a) increase no change
b) no change decrease
c) decrease decrease
d) no change no change
Question 15. Tantramar Corporation has the following shareholders equity on July 31, 2020:
Shareholders' equity
Share capital
$ 10 preferred shares, cumulative
10,000 shares authorized, 5,000 shares issued $ 2,000,000
Common shares,
600,000 shares authorized, 10,000 shares issued 300,000
Total share capital 2,300,000
Retained earnings 500,000
Total shareholders' equity $ 2,800,000
- Assume that during the following year the company had profit of $ 65,000 and declared and paid dividends of $ 15,000. The beginning balance of retained earnings on the statement of retained earnings for the year ended July 31, 2021 is
a. $500,000.
b. $565,000.
c. $550,000.
d. Cannot be determined from the information provided