| Question 1. | Question : | (TCO 7) Stockholders of a corporation directly elect the |
| | Student Answer: | | board of directors. | | | | president of the corporation. | | | | chief financial officer of the corporation | | | | chairperson of the board. | | | |
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| Question 2. | Question : | (TCO 7) Which one of the following is not a stockholder’s right of ownership in a corporation? |
| | Student Answer: | | To vote and elect the board of directors | | | | To receive a proportionate share of the assets upon liquidation | | | | To maintain one’s proportional share of ownership in the corporation | | | | To declare dividends | | | |
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| Question 3. | Question : | (TCO 7) The difference between the issue price of the stock and the par value of the stock is |
| | Student Answer: | | market value. | | | | par value. | | | | additional paid-in capital. | | | | preferred stock. | | | |
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| Question 4. | Question : | (TCO 7) Stock that a corporation purchases from shareholders is called |
| | Student Answer: | | treasury stock. | | | | authorized stock. | | | | issued stock. | | | | outstanding stock. | | | |
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| Question 5. | Question : | (TCO 7) The effect of the declaration of a cash dividend is a(n) |
| | Student Answer: | | increase to liabilities and a decrease to stockholders’ equity. | | | | increase to liabilities and a decrease to assets. | | | | increase to assets and a decrease to liabilities. | | | | increase to stockholders’ equity and a decrease to assets. | | | |
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| Question 6. | Question : | (TCO 7) Book value per share of common stock is computed by dividing |
| | Student Answer: | | total paid-in capital by the number of common shares of stock issued. | | | | total paid-in capital by the number of common shares of stock outstanding. | | | | total stockholders’ equity by the number of common shares of stock issued. | | | | total stockholders’ equity by the number of common shares of stock outstanding. | | | |
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| Question 7. | Question : | (TCO 1) The main purpose of the statement of cash flows is to |
| | Student Answer: | | provide information about the cash receipts and cash payments during a period. | | | | provide information about the investing and financing activities during a period. | | | | prove that revenues exceed expenses if there is a net income. | | | | assist banking relationships. | | | |
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| Question 8. | Question : | (TCO 1) The statement of cash flows will not report |
| | Student Answer: | | the number of checks not written at the end of the period. | | | | how cash was used in the current period. | | | | changes in the cash balance for the current period. | | | | the sources of cash in the current period. | | | |
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| Question 9. | Question : | (TCO 1) The three types of activities reported on the statement of cash flows are |
| | Student Answer: | | operating, investments, and financing. | | | | operating, investing, and free flow. | | | | operating, investing, and financing. | | | | operating, indirect, and direct. | | | |
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| Question 10. | Question : | (TCO 1) Financing activities involve |
| | Student Answer: | | issuing debt. | | | | acquiring long-term assets. | | | | lending money. | | | | acquiring investments. | |
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