Accounting for Shareholder Equity & Comprehensive Income Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1.

What does the following equation calculate?


(Net Income - Preferred Dividends) / Number of Common Shares Outstanding

Question 2 2. Review the following image below to calculate the number of common shares outstanding.

Question 3 3. Woofy Pets, a company that specializes in gourmet pet food, earned $825,000 of net income this year. The company also paid common dividends of $60,000 and preferred dividends of $75,000. There are currently 1,250,000 million shares of common stock outstanding in Woofy Pets. What is the company's earnings per share?

Question 4 4. ABC Corporation is offering 300,000 common shares for sale. Investors immediately purchase 250,000 of those shares. What is the amount of outstanding shares?

Question 5 5. Maurice holds common stock in Kent Enterprises Corporation. If the company is forced to liquidate, what is Maurice's position in the order of priority for distribution of the net assets?

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Question 6 6. A company has total assets of $825,000 and shareholder equity of $632,000. Which of the following statements is MOST accurate?

Question 7 7. The difference between total assets and total liabilities is referred to as _____.

Question 8 8. Calculate the total assets of a company with $470,000 in liabilities, $819,000 in shareholder equity, and $287,000 in current assets.

Question 9 9.

A company declares a dividend using a short-term investment it is currently holding. The company's first journal entry for this transaction includes the following line:


Debit Investment $15,000

Credit Gain on appreciation $15,000


Which of the following is MOST accurate?

Question 10 10. An accounting record shows a debit in dividends payable and credit in cash. What event is this entry recording?

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Question 11 11. All of the following statements concerning property dividends are correct EXCEPT:

Question 12 12. When would a company issue a scrip dividend?

Question 13 13. What is comprehensive income?

Question 14 14. The changes to each stockholder equity component during a certain financial period is reported on the company's _____.

Question 15 15.

In the beginning of 2018, Alphabet Consulting Services had retained earnings of $22,000. Throughout 2018, the company brought in revenue of $900,000. It had a net income of $630,000 and paid $100,000 in dividends.


Calculate Alphabet Consulting Services' retained earnings at the end of 2018.

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Question 16 16. Which of the following information is recorded on a company's balance sheet?

Question 17 17. What are retained earnings?

Question 18 18. In 2017, Jackson's Lumber Mill reported $45,000 of common stock, $312,000 of retained earnings, and $700,000 of net income. Calculate the return on equity in 2017. Round your answer to two decimal places.

Question 19 19. For every dollar of equity, a company earns $1.87 of net income and $2.63 of gross income. What is the return on equity?

Question 20 20. What information is given in a company's return on equity ratio?

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Question 21 21. In order to calculate return on equity, an accountant will need to know both the shareholder's equity AND _____ of a company.

Question 22 22. In which of the following dividend situations would the company need to make a journal entry showing additional paid-in capital?

Question 23 23. All of the following would INCREASE a company's stockholder's equity EXCEPT:

Question 24 24. Which of the following events does NOT require an accounting journal entry?

Question 25 25. What is treasury stock?

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Question 26 26. Hardwired Consulting Inc. declares a stock dividend of 20% on its 30,000 common shares. If the current market value of the shares is $25 per share and the par value is $2 per share, what is the cost of the shares to be distributed?

Question 27 27. Which statement concerning preferred stock is MOST accurate?

Question 28 28. What are dividends?

Question 29 29. The date of declaration, date of record, and date of payment are three dates, in the order of occurrence, that are important for the payment of _____.

Question 30 30. An accounting record shows a debit in retained earnings and credit in dividends payable. What event is this entry recording?

Accounting for Shareholder Equity & Comprehensive Income Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Accounting 202: Intermediate Accounting II  /  Business Courses
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