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1. The advantages of corporations going public include all of the following except:
a. Professional management
b. Transferability of ownership
c. Limited shareholder liability
d. Ability to remove assets

2. The ownership of common stock in a corporation usually carries the following rights:
a. To vote for directors
b. To declare dividends
c. To share in a distribution of assets if the corporation is to be liquidated
d. Both a and c

3. Cash dividends paid to stockholder’s will appear in which section of the statement of cash flows:
a. Operating
b. Investing
c. Financing
d. Discontinued

4. Publick corporations are required by law or regulation to perform all of the following except:
a. Submit much of their financial information to the SEC for review
b. Make regularly dividend payments to all stockholders
c. Have their annual financial statements audited by an independent CPA
d. Disclose their financial information to the public

5. A2-for-1 stock split will have what effect upon the following tems?

Total Assets Total stockholders’ Equity Shares Issued Shares Outstanding
a. None None Increase Increase
b. None Increase None Decrease
c. Increase Decrease Increase Decrease
d. Decrease Decrease None Decrease

6. Which of the following is not a condition to capitalize a lease?
a. Bargain purchase
b. Transfer of title
c. Term is more than 75% of economic life
d. Present value of minimum lease payments is less than 90% of the fair market value of the asset

7. The current portion of long-term debt should be reported:
a. Separately in the long-term liabilities section of the balance sheet
b. In the long-term liabilities section of the balance sheet, along with the other long-term debt
c. In the current liabilities section of the balance sheet
d. In a separate section of the balance sheet, between long-term liabilities and shareholders’ equity

8. Hickory Corporation plans to invest $ 200 million to earn about 18% before income taxes. The company is considering whether it should raise the $ 200 million by issuing 10% bonds payable to capital stock. If the company issues the bonds, it will probably report:
a. Lower net income and lower income taxes expense than if it issues capital stock
b. Higher net income and higher income taxes expense than if it issues capital stock
c. Lower net income and higher income taxes expense than if it issues capital stock
d. Higher net income and lower income taxes expense than if it issues capital stock

9. The present value:
a. Will always be greater than the future value
b. Will always be less than the future value
c. Will always be equal to the future value
d. Can be greater than, less than, or equal to the future value depending upon interest rates and the time period involved

10. Which of the following is an example of a contingent liability?
a. A lawsuit pending against a restaurant chain for improper storage of perishable food items
b. The liability for future warranty repairs on computers sold during the current period
c. A corporation’s long-term employment contract with its chief executive officer
d. A liability for notes payable with interest included in the face amount

1 Thought on Please help me with these questions?
  1. Reply
    ferruccio
    June 23, 2011 at 5:01 pm

    I’m afraid this is the wrong section
    I would advise you to go to
    Business & Finance

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