Stockholders' equity

Multiple choice questions (MCQs)

A person who purchases common stock of a corporation is known as:

A person who purchases preferred stock of a corporation is known as:

Which of the following statements is not true about preferred stock?

Who is known as the real owner of the corporation?

According to current standards, mandatorily redeemable preferred stock is required to be reported as:

The shares of common and preferred stock that have been issued and outstanding are reported in which section of balance sheet?

Any unpaid dividend is carried forward to the future periods for which type of stock?

The Southern company issued 5,000 shares of its $10 par value common stock. These shares were issued at a price of $25 per share. The correct journal entry to record this transaction is:

Which of the following is not affected as a result of stock split?

The following information has been extracted from the balance sheet of Washington Corporation as on December 31, 2017:

• Number of shares of common stock authorized: 200,000 shares
• Number of shares of common stock issued and outstanding: 80,000 shares
• Par value per share: $10

On January 1, 2018, the board of directors proposed a 7-for-5 stock split which was approved.

The 7-for-5 stock split would increase the number of shares issued and outstanding by:

Which of the following cannot be a component of stockholders’ equity section of the balance sheet?

Sometime companies buyback their own shares which are known as:

Which of the following is not true about treasury stock?

The US Company repurchased its own shares of common stock. The relevant information is given below:

• Number of shares repurchased: 5,000 shares
• Par value per share of US Company: $10
• The price at which shares were repurchased: $20 per share

Based on the above information, the journal entry to record the repurchase of 5,000 shares under cost method would be:

book value per share of common stock = ?

Which of the following factors may affect the market price of preferred stock?

Treasury stock is a(n)

The following information has been extracted from the balance sheet of London Corporation as on December 31, 2017:

• Total stockholders’ equity: $25,000,000
• Preferred stock (issued and outstanding): $5,000,000
• Average No. of shares of common stock outstanding: 2,000,000 shares

On the basis of above information, the book value per share of common stock is:

Dividends in arrears on cumulative preferred stock are disclosed as:

Which of the following statements is not true about common stock of a large, publicly owned corporation?