SEMI-FINALS REVIEW: Corporation - Nature And Formation | Accounting For Corporation Flashcards
(196 cards)
1
Q
It is not in reality a natural person but the law treats it as if it was because like a person, it can acquire and sell its own properties, enter into contract, incur liabilities, can sue and can be sued to court as an individual entity separate and distinct from the owners.
A
Corporation
2
Q
It is the biggest and most complicated form of business organization because the so many reportorial requirements.
A
Corporation
3
Q
It is formed by any person, partnership, association or corporation, singly or jointly with others but not more than fifteen (15) in number.
A
Corporation
4
Q
The first to organize the corporation and originally sign the Articles of Incorporation are called __________.
A
Incorporators
5
Q
They must be natural persons (not artificial) in a corporation.
A
Incorporators
6
Q
It exists because of the operation of law.
A
Corporation
7
Q
It is known as the Revised Corporation Code of 2019.
A
Republic Act No. 11232
8
Q
This means that a corporation as an “artificial person” has a legal personality, separate and distinct from its shareholders.
A
Separate Legal Entity
9
Q
The ownership of a corporation is divided into units called “shares” which can be transferred from one person to another without the consent of other shareholders.
A
Transferable Unit of Ownership
10
Q
This means that the shareholders are liable only of the corporation’s debts on the extent of their capital contributions.
A
Limited Liability of Shareholders
11
Q
This means that a corporation has the capacity for continued existen ce because
A
Continuity of Existence
12
Q
because there will be hundreds if not thousands of shareholders, it will be difficult for each one of them to partake in managing the business. Thus, they elect among themselves to form a _______.
A
Governing Body
13
Q
It can only be dissolved with the consent of the state.
A
Corporation
14
Q
Enumerate characteristics of a Corporation:
A
- Separate Legal Entity
- Transferable Unit of Ownership
- Limited Liability of Shareholders
- Continuity of Existence
- Governing Body
15
Q
The corporation law provides that the number of board of directors be not less than ____ but not more than _______.
A
five; fifteen
16
Q
Enumerate classification of Corporation:
A
- AS TO PURPOSE
- AS TO LAW OF CREATION
- AS TO MEMBERSHIP HOLDINGS
- AS TO ADMISSION OF SHAREHOLDERS
- AS TO OTHER PURPOSE
17
Q
Enumerate the Classification of Corporation AS TO PURPOSE:
A
- Public Corporation
- Private Corporation
- Quasi-Public Corporation
18
Q
It is one that is formed or organized to govern a portion a portion of the state. Examples are barangays, municipalities, cities and provinces.
A
Public Corporation
19
Q
It is one that is formed for some private purpose, benefit, aim or end.
A
Private Corporation
20
Q
It is a private corporation which is given a franchise to perform public duties but is organized for profits like bus and airlines, light and power, telephone companies or government-owned and controlled corporation.
A
Quasi-Public Corporation
21
Q
Enumerate the Classification of Corporation AS TO LAW OF CREATION:
A
- Domestic Corporation
- Foreign Corporation
22
Q
It is one that is organized under the Philippine laws,
A
Domestic Corporation
23
Q
It is one that is organized under any law other than the Philippines.
A
Foreign Corporation
24
Q
Enumerate the Classification of Corporations AS TO ADMISSION OF SHAREHOLDERS:
A
- Open Corporation
- Closely-Held Corporation
25
Enumerate the Classification of Corporation AS TO MEMBERSHIP HOLDINGS:
- Stock Corporation
- Non-Stock Corporation
26
It is a private corporation organized for profit. It is divided into share of stock and is authorized to distribute corporate profits on the basis of shares held.
Stock Corporation
27
It is a private corporation organized “not for profit.” If by incident it generates profits, such profits should be spent to continue attaining the objectives of its creation. Examples are civic, religious, social, charitable institutions, etc.
Non-Stock Corporation
28
It is one in which any person is welcomed to become a shareholder.
Open Corporation
29
It is one in which ownership is limited to selected persons or members of the family.
Closely-Held Corporation
30
Enumerate Classification of Corporation AS TO OTHER PURPOSE:
- Ecclesiastical Corporation
- Lay Corporation
31
It is one which is organized for religious purposes.
Ecclesiastical Corporation
32
It is one which is organized for a purpose other than religious purposes.
Lay Corporation
33
Enumerate the Components of Corporation:
- Corporators
- Incorporators
- Shareholders
- Members
- Promoters
- Board of Directors
- Subscribers
34
They are those who composed the corporation whether as shareholders or members. Hence, they include incorporators, shareholders or members.
Corporators
35
They are those who originally formed the corporation who executed and signed the Articles of Incorporation. They must be natural persons as distinguished from artificial persons.
Incorporators
36
They are owners of stock in a corporation. They may also be natural persons or artificial persons.
Shareholders
37
They are corporators of a non-stock corporation.
Members
38
They are the one who undertake to form a group of persons interested in organizing a corporation. They procure subscriptions or capital for the corporation.
Promoters
39
A governing body formed out of the shareholders.
Board of Directors
40
This acts as the policy-making body of the corporation.
Board of Directors
41
This is composed of not less than five (5) but not more than eleven (11) shareholders or members duly elected from among themselves.
Board of Directors
42
This is headed by the Chairman of the Board who is considered to be the most powerful and influential person in the corporation.
Board of Directors
43
They are natural or artificial persons who have agreed to buy original and unissued stocks of the corporation.
Subscribers
44
Each incorporator of a stock corporation must own or be a subscriber to at least_______ share capital stock.
one (1)
45
The formation of a corporation usually constitutes three (3) basic stages:
- Organization Stage
- Incorporation Stage
- Commencement Stage
46
This is the stage where persons who do the preliminary arrangements made by the incorporators will come in. They will set-up a tentative working organization and procure subscriptions and capital for the corporation.
Organization Stage
47
_________ of Revised Corporation Code states that "Stock Corporation" shall not be required to have a minimum capital stock except as otherwise specifically provided by special law.
Section 12
48
The penalties for the unauthorized use of corporate name shall be a fine ranging from ___________________ to _______________________.
Ten Thousand Pesos (P10,000); Two Hundred Thousand (P200,000)
49
___________ of the Revised Corporation Code states that a "Corporation shall have perpetual existence unless its Article of Incorporation provides otherwise". This means that a corporation has an unending life of existence.
Section 11
50
A ________ shall have a period of two (2) years to resume operations and comply with all the requirement that the commission shall prescribe.
Delinquent Corporation
51
If a corporation does not formally organize and commence its business within ______ years from the date of its incorporation, its certificate of incorporation shall be deemed revoke as of the day following the end for the ______ year period.
five (5)
52
If a corporation has commenced its business but subsequently becomes Inoperative for a period of at least ______ consecutive years, the Commission may after due notice and hearing, piace the corporation under delinquent status.
five (5)
53
This may be amended by a majority vote of the Board of Directors or Trustees and the vote or written assent of the stockholders representing at least two-third (2/3) of the outstanding capital stock.
Articles of Incorporation
54
This refer to the "rules and regulations adopted by the corporation administering its Internal government”.
By-laws
55
Enumerate Corporate Records:
- Minutes Book
- Stock and Transfer Book
- Subscription Book
- Stock Certificate Book
56
The person who is given the authority by an incorporator/stockholder to attend meetings on his behalf is called _____.
Proxy
57
These are expenditures incurred while in the process of organizing a corporation.
Organization Cost
58
Ownership in a stock corporation is represented by its share capital which is divided into units called "______".
shares
59
A shareholder's ownership in the corporation is determined by________________________________.
the number of shares he owns
60
This certificate can only be issued to the individual shareholders who have fully paid his subscription.
"Share (Stock) Certificate"
61
Ownership is evidenced by a document called __________________.
"Share (Stock) Certificate".
62
This certificate is signed by the President or Vice-President of the corporation, counter signed by the Secretary and sealed with the seal of the corporation.
Share Stock Certificate
63
The minutes of all meetings of shareholders or members and that of Board of Directors or Board of Trustees are recorded by the Corporate Secretary in this book.
Minutes Book
64
This book principally records the stock isuances and cancellations.
Stock and Transfer Book
65
Enumerate the Books in Stock and Transfer Books:
- Subscriber’s Ledger
- Shareholder’s Journal
- Shareholder’s Ledger
66
this is actually a subsidiary ledger for the controlling account, subscription Receivable in the General Ledger.
Subscriber’s Ledger
67
This shows the list of shareholders with the corresponding share certificate number in numerical sequence and shares issued to them including share certificates that were cancelled.
Shareholder’s Journal
68
This is a subsidiary ledger for Share Capital account in the General Ledger. The total number of shares indicated in the shareholder's Journal and the Share Capital account in the General Ledger.
Shareholder’s Ledger
69
It is a book of printed blank subscription.
Subscription Book
70
It is a book of printed blank certificate of stock.
Stock Certificate Book
71
It is that portion of the paid-in capital arising from issuance of share capital which must remain untouched and unimpaired in protection to corporate creditors and cannot be returned to shareholders in any form during the Ifetime of the corporation, except when a liquidation happens and only after the debts have been paid.
Legal Capital of a Corporation
72
Legal capital is the aggregate par value shares of all issued and subscribed shares.
Par Value Shares
73
It is the total consideration received by its corporation for the issuance or its share to the shareholders including the excess of issue price over the stated value.
No Par Value Share
74
It is a legal principle that prohibits a private corporation to distribute its legal capital to the shareholders for the protection of corporate creditors during the lifetime of a corporation.
Trust Fund Doctrine
75
a corporation can declare and pay dividends to the shareholders out of its "____" or "_________________________________________”
free; unappropriated accumulated profits (losses)
76
It is defined as “residual interest of the owners in the assets of the corporation as a business entity, measured by the excess of assets over liabilities”, in the simplest language.
Shareholders’ Equity
77
It refers to the capital section of a corporation.
Shareholders’ Equity
78
Enumerate the Three sections that comprises the Statement of Financial Position under corporate form of business:
- Assets
- Liabilities
- Shareholders’ Equity
79
The term "Share Capital" has so many connotations. Enumerate them:
- Authorized Share Capital
- Subscribed Share Capital
- Issued Share Capital
- Unissued Share Capital
- Treasury Share
- Outstanding Share Capital
80
It refers to the maximum amount fixed by the corporate charter or articles of incorporation to be subscribed and paid-in by the shareholders either in money or property, labor or services at the organization of a corporation o afterwards upon which it is to conduct its operation.
Authorized Share Capital
81
This represents the amount of shares which have bec subscribed but not yet fully paid.
Subscribed Share Capital
82
This represents the amount of shares which have been fully paid and the share (stock) certificates have been issued.
Issued Share Capital
83
This certificates represents that part of a corporation authoried share capital for which share (stock) certificates not yet been issued but are available for issuance in the future.
Unissued Share Capital
84
This represents a corporation's own share which has been issued but later reacquired not for the purpose of cancellation or retirement. This share is Issued but not outstanding.
Treasury Share
85
This refers to the Issued Share Capital and still on the hands of the shareholders.
Outstanding Share Capital
86
Based on the current Philippine Accounting Standards (PAS) No. 1. Shareholder's equity is composed of three (3) sub-sections. Enumerate them:
- Share Capital
- Reserve
- Accumulated Profits (Losses)
87
This is the first sub-section of shareholders' equity.
Contributed Capital
88
This refers to the portion of the paid-in capital representing the amount of the total par or stated value of the shares issued.
Share Capital
89
This refers to the portion of the share capital that a prospective investor agreed to subscribe but not yet paid-in full and therefore, still unissued.
Subscribed Share Capital
90
This refers to the unpaid portion of the share capital that the prospective investor has agreed to subscribe.
Subscription Receivable
91
Enumerate the elements Contributed Capital.
- Share Capital
- Subscribed Share Capital
- Subscription Receivable
92
This is the second sub-section of shareholders' equity. This is one of the most recent development in the presentation of shareholders’ equity.
Reserve
93
Reserve consists of the following:
- Share Premium Reserve
- Revaluation
- Accumulated Profits (Losses) Reserve
94
It is otherwise known as "additional paid in capital" representing the paid in capital in excess of the par value or stated value, excess of the sales proceeds of treasury stock over cost donated capital and other premiums in relation to the retirement of shares.
Share Premium Reserve
95
This is also called "Revaluaton Increment in Property” or "Asset Revaluation Reserve".
Revaluation Reserve
96
This Is the excess of value of plant assets as a result of appraisal over net book value.
Revaluation Reserve
97
It is the portion of the Accumulated Profits and Losses that is appropriated for plant expansion, purchase of Treasury Shares, etc.
Accumulated Profits (Losses) Reserve
98
Previously known as Retained Earnings.
Accumulated Profits (Losses)
99
This account represents the cumulative income and expense from the start it operates up to the present.
Accumulated Profits (Losses)
100
The Cost of the Treasury Shares that has been deducted from Accumulated Profits and Losses to arrive at the Shareholders' Equity has first appeared in the reserve section under the account:
"Appropriated Accumulated Profits (Losses) for Treasury Shares".
101
The ________________________ that has been deducted from Accumulated Profits and Losses to arrive at the Shareholders' Equity has first appeared in the reserve section under the account "Appropriated Accumulated Profits (Losses) for Treasury Shares".
Cost of the Treasury Shares
102
_______ of the Revised Corporation Code defines a one person corporation as:
Sec. 116
103
"A corporation with a single stockholder: Provided: That only natural person, trust, or an estate may form a _____________________.”
one person corporation
104
It shall not be required to have a minimum authorized capital stock except as otherwise provided by special law and is not also required to submit and file a corporate by-laws.
one person corporation
105
They are prohibited from retaining surplus profits in excess of one hundred percent (100%) of their paid-in capital stock with exception contained in Section 42 of the Revised Corporation Code.
Stock Corporation
106
They formulate policies.
Board of Directors
107
They execute the said policies.
President
108
It is a corporation with a single stockholder:
One Person Corporation (OPC)
109
R.A. No. 11232 is known as the Revised Corporation Code 2019.
(TRUE OR FALSE)
True
110
A corporation is formed by any person, partnership, ass ociation or corp ration,-singly or jointly with others but not more than fifteen (15) in number, for lawful purpose/s.
(TRUE OR FALSE)
True
111
A corporation may have perpetual existence unless its articles of incorporation limits its life.
(TRUE OR FALSE)
True
112
A corporate term for a specific period may be extended or shortened by amending the articles of incorporation.
(TRUE OR FALSE)
True
113
Stock Corporations are no longer required of a minimum capital stock.
(TRUE OR FALSE)
True
114
A corporate name should not be identical or similar to one already registered with SEC.
(TRUE OR FALSE)
True
115
A corporate name should bear suffix "Corp." for corporation, "Inc." for Incorporated, etc.
(TRUE OR FALSE)
True
116
Stock corporations are prohibited from retaining surplus in excess of one hundred percent (100%) of their paid-in capital stock.
(TRUE OR FALSE)
True
117
The Securities and Exchange Commission is prohibited by law to register a corporation engage solely in the practice of public accounting.
(TRUE OR FALSE)
True
118
The Securities and Exchange Commission is prohibited by law to register a corporation engage solely in the practice of public accounting.
(TRUE OR FALSE)
True
119
CPAs are in violation to R.A. 9298 known as "Philippine Accountancy Act of 2004" if they formed a corporation for the practice of accounting profession.
(TRUE OR FALSE)
True
120
CPAs are prohibited from being a shareholder of any share corporation.
(TRUE OR FALSE)
False
121
A person of minor age can be a shareholder but can never be an incorporator in a corporation.
(TRUE OR FALSE)
True
122
A corporation is like an artificial person. It can transact business under its own name, hold or disposed property but it can never be sued to court.
(TRUE OR FALSE)
False
123
Authority of the corporation to operate has to be granted by the state.
(TRUE OR FALSE)
True
124
A corporation can be formed by mere agreement among shareholders.
(TRUE OR FALSE)
False
125
There is no law prohibiting a corporation to acquire shares of another corporation.
(TRUE OR FALSE)
True
126
A one person corporation is required to file an Article of Incorporation but not by-laws.
(TRUE OR FALSE)
True
127
Like in any ordinary corporation, a one person corporation has no minimum capital stock requirement.
(TRUE OR FALSE)
True
128
The most powerful and influential person in a corporation is the Chairman of the Board of Directors.
(TRUE OR FALSE)
True
129
The Board of Directors shall exercise the corporate powers of a corporation.
(TRUE OR FALSE)
True
130
A share certificate can be issued to those subscribers who partially paid their subscriptions.
(TRUE OR FALSE)
False
131
As a requirement for incorporation, only natural persons can execute and signed the Articles of Incorporation.
(TRUE OR FALSE)
True
132
An incorporator of a share corporation must own or be a subscriber to at least one (1) share capital of that corporation.
(TRUE OR FALSE)
True
133
Shares cannot be transferred without the consent of the other shareholders.
(TRUE OR FALSE)
False
134
If by incident, a non-share, non-profit corporation generates profit, such profit
should be spent to continue attaining the objectives of its creation.
(TRUE OR FALSE)
True
135
If a corporation failed to operate within 5 years from the date of incorporation, its corporate powers ceased and the corporation is deemed revoke.
(TRUE OR FALSE)
True
136
A corporation acquires its own juridical personality by the time Securities and Exchange Commission issues the Certificate of Incorporation.
(TRUE OR FALSE)
True
137
A corporation may reach up to hundreds and thousands of shareholders.
(TRUE OR FALSE)
True
138
Death of a shareholder will dissolve the corporation.
(TRUE OR FALSE)
False
139
The corporation has perpetual life in existence.
(TRUE OR FALSE)
True
140
The legal capital of a corporation represents the paid in capital or the amour invested by the stockholders.
(TRUE OR FALSE)
True
141
A corporation can be an incorporator of another corporation.
(TRUE OR FALSE)
False
142
Which of the following is not an attribute of a corporation?
a. an artificial being created by the operation of law
b. having the rights of succession
c. have the powers, attributes and properties expressly authorized by law or incident to its existence.
d. have limited liability of shareholders
d. have limited liability of shareholders
143
These refer to the rules and regulations adopted by the corporation in administering its internal government-
a. articles of incorporation
b. minutes of meeting
c. by-laws
d. none of the above
c. by-laws
144
The "corporate charter" refers to-
a. share (stock) and transfer book
b. articles of incorporation
c. by-laws
d. corporate name
b. articles of incorporation
145
The governing body of a corporation is called-
a. board of directors
b. Shareholders
c. incorporators
d. subscribers
a. board of directors
146
Owners of a of stock of a corporation
a. underwriter
b. Subscriber
c. promoters
d. shareholders
d. shareholders
147
Ownership in a corporation is represented by its share capital which is divided into units called-
a. Shares
b. Par Value
c. paid-in capital
d. share certificate
a. Shares
148
Refers to the maximum amount fixed by corporate charter to be subscribed and paid-in by the shareholder -
a. authorized share capital
b. Subscribed Share Capital
c. unissued share capital
d. treasury share
a. authorized share capital
149
Refers to the issued share capital and still in the hands of the shareholders-
a. Unissued Share Capital
b. Authorized Share Capital
c. outstanding share capital
d. subscribed share capital
c. outstanding share capital
150
The ownership in shares of a corporation is evidenced by a document called-
a. shares
b. share (stock) certificate
c. stock warrants
d. none of the above
b. share (stock) certificate
151
The maximum life of a corporation to exist is-
a. perpetual (no limit)
b. 50 years
c. 40 years
d. 30 years
a. perpetual (no limit)
152
Cost and expenses incurred before and during the corporate formation such as: attorney's fees, printing cost of certificate, incorporation fees, etc.-
a. promoters' cost
b. organization cost
c. incorporation cost
d. none of the above
b. organization cost
153
Natural or artificial persons who have agreed to buy the original and unissued shares of a corporation are called-
a. corporators
b. subscribers
c. promoters
d. none of the above
b. subscribers
154
Which of the following are examples of a non-share, non-profit corporation?
a. charitable institution
b. religious institution
c. civic and social institution
d. all of the above
d. all of the above
155
Which of the following statements is true concerning organization cost?
a. are expenditures incurred in relation to corporate formation;
b. shall no longer be deferred and amortized;
c. organization costs are expensed as they are incurred;
d. all of the above
d. all of the above
156
Which of the following statements is false concerning "legal capital"?
a. it is portion of paid-in capital that cannot be returned to stockholders in the lifetime of a corporation;
b. it is the aggregate amount at par value of shares issued;
c. it cannot be declared as cash, share and property dividends
d. it refers to both ordinary and preference shares issued
c. it cannot be declared as cash, share and property dividends
157
The accumulated profit (loss) of a corporation is called -
a. Dividends
b. Retained Earnings
c. Shareholders' Equity (deficit)
d. Treasury Shares
b. Retained Earnings
158
A stock corporation is a public corporation organized for profit.
(TRUE OR FALSE)
False
159
When there is one class of stock issued by a corporation it is always understood to be preference shares.
(TRUE OR FALSE)
False
160
Ordinary and Preference shareholders have the same rights and both enjoy the same privileges especially in distribution of dividends.
(TRUE OR FALSE)
False
161
The legal share capital of a corporation is divided into units called "shares".
(TRUE OR FALSE)
162
Preference shareholders are assured or guaranteed with dividends at the end of the year.
(TRUE OR FALSE)
False
163
A par value share has a nominal value stated on the face of the share certificate.
(TRUE OR FALSE)
True
164
The Revised Corporation Code of the Philipines prohibits the issuance of share
at less than its par value.
(TRUE OR FALSE)
True
165
When a share is issued below its par value, the share is said to be "watered share"
(TRUE OR FALSE)
True
166
The director or officer consenting the sale of stock below its par value will be held solidarily liable with the shareholders' concerned to the corporation and creditors for the difference between the fair value received at the time of issuance of the share and the par.
(TRUE OR FALSE)
True
167
The memorandum entry and journal entry are the two methods of accounting for share capital transactions.
(TRUE OR FALSE)
True
168
Memorandum differs from journal entry method as far as authorization and issuance of certificate are concerned.
(TRUE OR FALSE)
True
169
Subscription is the binding agreement or a contract whereby an investor agrees to acquire a certain number of unissued share which may be paid in full or in an installment basis.
(TRUE OR FALSE)
True
170
Share certificates are issued upon full payment of incorporators' subscription balance only.
(TRUE OR FALSE)
False
171
When the share is sold at more than the par value, the difference is "share premium", which is then a credit.
(TRUE OR FALSE)
True
172
When the share is sold less than the par value, the difference is called "discount on share capital" , which is then a debit.
(TRUE OR FALSE)
True
173
When the share is sold either premium or discount, the debit is always equal to the subscription price of the share.
(TRUE OR FALSE)
True
174
The highest bidder is a person who is willing to pay the unpaid balance of the delinquent subscription plus accrued interest with the "least" number of shares.
(TRUE OR FALSE)
True
175
When a subscriber failed to pay his subscription balance after lawful calls and notices have been sent to him, all shares covered in the said subscription will be considered "delinquent"
(TRUE OR FALSE)
True
176
When a corporation is authorized to issue ordinary and preference shares, a proper distinction of these share should be made from the authorization up to the issuance of share certificate.
(TRUE OR FALSE)
True
177
When a shareholder transfers his share to another investor, the corporate assets changed.
(TRUE OR FALSE)
False
178
A corporation cannot accept non-cash assets as payment of its subscription.
(TRUE OR FALSE)
False
179
When a memorandum entry is used, the account share capital is credited upon issuance of shares.
(TRUE OR FALSE)
True
180
Under journal entry method, the amount of share capital issued is determined by deducting the balance of unissued share capital account from the balance of the authorized share capital.
(TRUE OR FALSE)
True
181
Partnership net assets that are transferred to the corporation should be recorded in the new corporation's books at their book value.
(TRUE OR FALSE)
False
182
Share certificates are issued to subscribers upon-
a. full payment of subscription
b. date of subscription
c. authorization
d. partial payment of subscription
a. full payment of subscription
183
The Share Premium Account is recorded as a credit when-
a.shares are sold higher than par value
b. share are sold less than par value
c. shares are sold at par value
d. none of these
a.shares are sold higher than par value
184
If share capital is issued for tangible or intangible property, the value of share capital is equal to the following value in order of priority:
a. fair market value of the property received
b. fair market value of the capital
issued
c. par value of the share capital issued
d. all of the above priority
185
Organization cost when incurred during the organizational stage shall be charged to -
a. Organization Expense
b. Corporate Income
c. Accumulated Profits (Losses)
d. all of the above
a. Organization Expense
186
Under journal entry method, the issuance of share capital should be credited to-
a. unissued share capital
b. share capital
c. authorized share capital
d. subscribed share capital
a. unissued share capital
187
When shares are subscribed in an insallment basis, the credit to Share Premium Account is recorded at -
a. the time of issuance
b. the time of payment
c. the time of subscription
d. the time of authorization
c. the time of subscription
188
When shares are subscribed at par value, the debit to Subscription Receivable should be
at -
a. subscription price
b. par value
c. fair market value
d. all of the above
189
Under memo entry and journal entry methods of recording share capital transactions, both differ in the recording of:
a. authorization and issuance of certificate
b. subscription and issuance of certificate
c. collection and subscription
d. authorization and subscription
190
All of the following are shareholdery' equity accounts except-
a. accumulated profits (losses) account
b. share premium
c. subscribed share capital
d. cash dividends payable
d. cash dividends payable
191
The share is considered "watered share" when-
a. assets are overvalued
b. assets are understated
c. assets are not affected
d. none of these
a. assets are overvalued
192
The cost of organizing a corporation should be-
a. reported as intangible asset
b. reported as tangible asset
c. expense in the year of organization
d. deducted from share capital
c. expense in the year of organization
193
Which of the following is a characteristics of preference share?
a. priority to receive dividends than ordinary share
b. assurance of dividend payment
c. voting rights
d. none of the above
a. priority to receive dividends than ordinary share
194
Which of the following is a characteristic of an ordinary share?
a. guaranteed dividends
b. receive dividends before preference shareholder
c. voting rights
d. none of these
c. voting rights
195
When no-par ordinary shares without a stated value is issued for cash, the Ordinary Shares account is credited for an amount equal to the cash proceeds.
(TRUE OR FALSE)
196
When no-par ordinary shares without a stated value is issued for cash, the Ordinary Shares account is credited for an amount equal to the cash proceeds.
(TRUE OR FALSE)
