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If a corporation has 5,000,000 in current assets and 1,000,000 in current liabilities, the corporation is liquid. A. True B. False
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- 1. It refers to the capital of a corporation that cannot be withdrawn until final liquidation. 2. Those who compose the corporation whether shareholders or members or both. 3. This occurs when there is a change in the capital structure of the entity. 4. The residual interest of owners in the net assets of a corporation. 5. It is the earmarking of retained earnings for a certain purpose which may be legal, contractual or voluntary. choices:Which statement is incorrect? * Book value per share is the claim of a shareholder in the net assets of the corporation for every share held in the corporation. If a corporation has 2 classes of shareholders, the book value per share should be computed for both preference shares and ordinary shares. Book value per share assumes that assets are realized at book values and liabilities are liquidated at book values. Total gains (losses) on realization of assets and liquidation of liabilities, if there are any, are assumed to sum up to zero. Excess over par refers to the amount of shareholders’ equity in excess of the total par value of the preference shares and ordinary shares issued by the corporation. none of the aboveWhich of the following are included in the total legal capital of a corporation assuming the corporation has a par value?I. Share capital accounts II. Additional paid in capital accountsIII. Retained EarningsIV. Share dividends distributable I only I and II I and III I and IV
- The total amount of cash and other assets received by a corporation from the stockholders in exchange for the shares is ________. A. always equal to par value B. referred to as retained earnings C. always below its stated value D. referred to as paid-in capitalQuestion 51. Distinguish between corporations and sole proprietorships in terms of the followingcharacteristics:a) Owners’ liability for debts of the businessb) Transferability of ownership rightsc) Continuity of existenced) Taxation on income2. Distinguish between paid-in capital and retained earnings of a corporation. Why issuch a distinction useful?3. Explain the significance of the following dates relating to cash dividends: date ofdeclaration, date of record and date of payment.4. Distinguish between a stock split and a stock dividend. Is there any reason for thedifference in accounting treatment of these two events?Which of the following characteristics of a corporation limits a stockholder's loss to the amount of his or her investment in the stock of the corporation? Question 7Answer a. Separate legal entity b. Separation of ownership and management c. Transferability of ownership d. Limited liability
- Real assets of a corporation are claims on their financial assets * True FalseWhich of the following are included in the total contributed capital of a corporation? I. Share capital accountsII. Additional paid in capital accountsIII. Retained EarningsIV. Share dividends distributable I,II,III and IV I ,II and IV I and II I,II and IIIWhat is the net increase or (net decrease) in the identifiable assets of SD Corporation?a. 13,700,500b. 13,307,500c. 13,957,500d. 13,050,500
