Chapter 11 Accounting

Question 1

Journal Entry : Issuing common stock or preferred stock at par.

Answer 1

Debit cash and credit common/preferred stock

Question 2

Journal Entry : Issuing common stock or preferred above par

Answer 2

Debit cash and credit face value of common stock and additional PIC - added amount.

Question 3

Journal Entry : purchasing treasury stock

Answer 3

Debit treasury stock, credit cash

Question 4

Journal Entry : Cash dividends date of declaration

Answer 4

Debit dividends (RE) and credit dividends payable

Question 5

Journal Entry : Cash dividends date of payment

Answer 5

Debit dividends payable and credit cash

Question 6

Journal Entry : Stock dividends

Answer 6

Debit retained earnings and credit cash

Question 7

What does treasury stock mean

Answer 7

the number of shares repurchased by that company. Does not result in recognizing a gain or loss. REDUCES total stock holders equity.

Question 8

treasury stock is increased by what?

Answer 8

a credit

Question 9

Dividends on preferred stock are expressed as

Answer 9

percentage based on the par value of the stock

Question 10

If preferred stock is cumulative then dividends are what

Answer 10

guaranteed.

Question 11

All dividends in arrears are paid to preferred shareholders before

Answer 11

dividends are paid to common stock holders.