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ACC 102 Chapter 12

True or False: The price/earnings ratio is a measure of investors’ confidence in a company’s future.
True
True or False: Stockholders elect the board of directors which appoints the officers of a corporation.
True
True or False: the board of directors carries out the day-to-day operations of the corporation.
False
True or False: The liability of a stockholder is usually limited to the stockholders’ investment in the corporation.
True
True or False: The declaration of a cash dividend causes an increase ina corporation’s liabilities at the date of record.
False

Date of declaration not date of record.

True or False: No entry is required on the date of record for a cash dividend.
True
True or False: Stock options are often granted by a corporation to management personnel as a means of additional compensation to an motivation of employees.
True
True or False: The stockholders’ equity in a corporation consists of capital contributed by stockholders and retained earnings.
True

Balance sheet

True or False: Retained earnings consist of a pool of funds to be distributed to stockholders.
False
True or False: The cost of treasury stock is deducted from total contributed capital and retained earnings in determining total stockholders’ equity.
True.
Dividends yield equals?
dividends per share divided by market price per share.
A disadvantage of the corporate form of business is?
Government regulation.
Par value..?
is the legal capital established for a share of stock.
The Board of Directors of B Corp. declared a cash dividend on Jan 18th, 2011, to be paid on Feb. 18, 2011, to shareholders holding the stock on Feb. 2nd, 2011. given these facts, the date Feb 2nd 2011 is referred to as the ?
Date of Record.
All of the following are stockholders’ equity except?
Dividends payable.

— liability on the balance sheet.

Advantage, disadvantage, or not applicable to the corporate form of business: Separate legal entity.
Advantage.
Advantage, disadvantage, or not applicable to the
corporate form of business: Double Taxation
Disadvantage
Advantage, disadvantage, or not applicable to the corporate form of business: Continuous existence.
Advantage
Advantage, disadvantage, or not applicable to the corporate form of business: Unlimited liability
Not Applicable
Advantage, disadvantage, or not applicable to the corporate form of business: Government regulation
Disadvantage
Advantage, disadvantage, or not applicable to the corporate form of business: easy transfer of ownership
Advantage
Advantage, disadvantage, or not applicable to the corporate form of business: Ease of capital generation
Advantage
Advantage, disadvantage, or not applicable to the corporate form of business: Professional Management
Advantage
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