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Which of the following accounts is not reported in the stockholders’ equity section

Which of the following accounts is not reported in the stockholders’ equity section of the balance sheet?

a.Treasury Stock.

b.Common Stock.

c.Sales Revenue.

d.Retained Earnings.


46. Which of the following stages of equity financing comes last in the traditional order of progression?

a.Investment by friends and family of the founders.

b.Investment by the founders of the business.

c.Initial public offering (IPO). 

d.Outside investment by “angel” investors and venture capital firms.




47. In terms of total sales, assets, and earnings, the dominant form of business organization is the:

a.Sole proprietorship.



d.Limited liability company (LLC).



48. Common stockholders usually have all of the following rights except:

a.To receive dividends when declared.

b.To share in the distribution of assets.

c.To elect board of directors.

d.To participate in the day-to-day operations.



49. Which of the following is a reason that a corporation would prefer to issue stock instead of bonds?


Dividend payments can be deducted for income tax purposes but interest payments cannot.


Expansion is accomplished without surrendering ownership control.


The risk of going bankrupt is less.


All of the above are reasons for issuing stock.



50. Advantages of the corporate form that have led to the growth of this form of business ownership include all of the following except:

a.Ability to raise capital.

b.Low government regulation.

c.Limited liability.

d.Ability to transfer ownership.



51. Advantages of the corporate form of business include which of the following?

I.     Double taxationIV.  More paperwork

II.   Ability to raise capitalV.    Limited liability

III.  Ability to transfer ownership





II., III., V.


I., II., III.


II., IV., V.



52. Which of the following statements regarding the corporate form of business is correct?


The disadvantages are that generating capital is difficult and that owners have limited liability.


Disadvantages are that the business is subject to government regulations and double taxation on its income.


One disadvantage is that ownership is easy to transfer.


All of the other options are correct.



53. The disadvantages of the corporate form of business include:

a. Ability to transfer ownership.

b. Additional taxes.

c. Limited liability.

d. Ability to raise capital.



54. The correct order from the smallest number of shares to the largest number of shares is:

a. Authorized, issued, and outstanding.

b. Outstanding, issued, and authorized.

c. Issued, outstanding, and authorized. 

d. Issued, authorized, and outstanding.

Jan 25 2020 View more View Less

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