#1
Which of the following accounts represents ownership in a corporation?
Accounts Payable
Common Stock
Accumulated Depreciation
Prepaid Expenses
#2
What is the term used for the total earnings of a corporation's stockholders?
Net Income
Revenue
Dividends
Retained Earnings
#3
Which of the following is NOT a component of shareholders' equity?
Common Stock
Retained Earnings
Treasury Stock
Accounts Payable
#4
What is the accounting term for the allocation of a portion of a corporation's earnings to its shareholders?
Dividend
Retained Earnings
Interest Expense
Accrued Revenue
#5
What is the primary purpose of the statement of changes in equity?
To report cash inflows and outflows
To summarize changes in the financial position
To explain changes in shareholders' equity accounts
To reconcile differences between net income and cash flows
#6
Which of the following statements is true regarding the par value of a stock?
It represents the market value of the stock.
It is the same as the market value of the stock.
It indicates the minimum price at which the stock can be sold.
It is determined by the number of outstanding shares.
#7
What is the formula for calculating earnings per share (EPS)?
Net Income / Total Liabilities
Net Income / Total Equity
Net Income / Average Outstanding Shares
Total Equity / Average Outstanding Shares
#8
When a corporation issues additional shares of its stock, what happens to the existing shareholders' ownership?
Their ownership increases
Their ownership decreases
Their ownership remains the same
Their ownership becomes diluted
#9
Which financial statement reports changes in a corporation's equity over a period?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Changes in Equity
#10
What is the term used for the process of repurchasing a corporation's own stock from the market?
Stock Dividend
Stock Split
Stock Buyback
Stock Issuance
#11
What is the effect of a stock dividend on shareholders' equity?
Increases
Decreases
Remains the same
Becomes negative
#12
Which of the following is an example of a contra-equity account?
Common Stock
Treasury Stock
Retained Earnings
Dividends Payable
#13
What does the term 'stock split' refer to in accounting?
Issuing additional shares to existing shareholders
Combining multiple shares into one share
Dividing existing shares into multiple shares
Canceling existing shares
#14
In a cash dividend declaration, what happens to shareholders' equity?
Increases
Decreases
Remains the same
Becomes negative
#15
What does the term 'dividend yield' measure?
The rate of return on an investment in a stock
The total dividends paid by a company
The change in the market value of a stock
The proportion of earnings distributed as dividends
#16
What is the purpose of a stock repurchase program by a corporation?
To raise additional capital
To decrease earnings per share
To increase the market price of its stock
To provide dividends to shareholders
#17
What is the effect of a stock split on the number of shares outstanding and the par value per share?
The number of shares increases, and the par value per share decreases.
The number of shares decreases, and the par value per share increases.
Both the number of shares and the par value per share increase.
Both the number of shares and the par value per share decrease.