Question 1: A corporation issues 2,500 shares of common stock for P 45,000. The stock has a stated value of P10 per share. The journal entry to record the stock issuance would include a credit to Ordinary Shares for a.) P25,000 b.) P20,000 c.) P5,000 d.) P45,000
Multiple choice:
Question 1:
A corporation issues 2,500 shares of common stock for P 45,000. The stock has a stated value of P10 per share. The
a.) P25,000
b.) P20,000
c.) P5,000
d.) P45,000
Question 2:
When a corporation reacquired its own shares due to delinquency and there are no bidders, the share must be retired immediately.
Select one:
a.) True
b.) False
Question 3:
Using the journal entry method, what is the appropriate entry when there is an issuance of share capital?
a.) Debit to authorized share capital
b.) Credit to authorized share capitalc.
c.) Credit to unissued share capital
d.) Credit to share capital
Question 4:
An ordinary shareholder receives the same preference and rights as a preference shareholder.-
Select one:
a.) True
b.) False
Question 5:
Which statement below is not a reason for a corporation to buy back its own stock.
a.) for supporting the market price of the stock
b.) resale to employees
c.) bonus to employees
d.) to increase the shares outstanding
Question 6:
A journal entry for sale of fully paid stocks is not necessary under the memorandum method of accounting for share capital.
Select one:
a.) True
b.) False
Question 7:
a.) includes paid-in capital and liabilities
b.) is usually equal to cash on hand
c.) is shown on the income statement
d.) includes
Question 8:
A delinquent subscriber cannot obtain a portion of his subscriptions if sold to the highest bidder.
Select one:
a.) True
b.) False
Question 9:
A corporation has 50,000 shares of P28 par value stock outstanding that
has a current market value of P150. If the corporation issues a 4-for-1
stock split, the market value of the stock will fall to approximately
a.) It will not change at all
b.) P112.00
c.) P7.00
d.) P37.50
e.) P600.00
Question 10:
A corporation purchased 1,000 shares of its P5 par ordinary shares at
P10 and subsequently sold 500 of the shares at P20. What is the
amount of revenue realized from the sale?
a.) P0.00
b.) P10,000
c.) P2,500
d.) P5,000
Question 11:
The two main sources of stockholders' equity are investments
contributed by stockholders and net income retained in the business.
Select one:
a.) True
b.) False
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