ACC 291 Week 4 Practice Quiz

ACC 291 Week 4 Practice Quiz

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 ACC 291 Week 4 Practice Quiz

Practice Question 01

The stockholders of a corporation have unlimited liability.




































Practice Question 05

Which of the following is a disadvantage of the corporate business form?
















No income taxes

















Easy acquisition of capital

















Government regulation

















Continuous life



Practice Question 10

If a corporation issues 1,000 shares of $3 par common stock for $7 a share, how much is the legal capital?






































































Practice Question 20

For what reason might a company acquire treasury stock?
















To increase the number of shares of stock outstanding

















To reissue the shares to officers and employees under bonus and stock compensation plans

















To signal to the stock market that management believes the stock is overpriced

















To increase profit



Practice Question 30

Which one of the following is not a right of preferred stockholders?
















Priority to the assets in the event of liquidation

















Priority in relation to dividends

















Priority voting rights

















Priority to dividends and assets in liquidation.



Practice Question 59

If everything else is held constant, what will cause earnings per share to increase?
















The purchase of treasury stock

















The payment of a cash dividend to preferred stockholders

















The issuance of new shares common stock

















The payment of a cash dividend to common stockholders



Practice Question 56

Which of the following does not increase the return on common stockholders’ equity?
















An increase in the return on assets ratio

















An increase in the use of debt financing

















An increase in the company’s stock price

















An increase in the company’s net income



Practice Question 60

When a stock dividend is declared, which of the following accounts is debited?
















Common Stock Dividends Distributable

















Paid-in Capital in Excess of Par Value

















Common Stock

















Stock Dividends



Practice Question 55

Jaylo Inc. had net income of $500,000, net sales of $10,000,000 and paid cash dividends of $200,000 to the common stockholders. How much is Jaylo’s payout ratio?






































































Practice Question 54

Consider the following data for a corporation:


























































Net income
Preferred stock dividends
Market price per share of stock
Average common stockholders’ equity
Cash dividends declared on common stock

What is the return on common stockholders’ equity?



































































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