Corporation Concepts

Question 1

Ordinary share capital represents the residual ownership interest in a corporation. True or False?

Answer 1

True

Question 2

What is the minimum amount that par value shares can be issued for?

A. P1
B. P5
C. P100
D. No minimum amount for par value shares

Answer 2

D. No minimum amount for par value shares

Question 3

Treasury shares are treated as an asset, with the corporation buying its own shares. True or False?

Answer 3

False

Question 4

This corporate book/record contains notes of what happened during a stockholders’ or board meeting

A. Board resolution
B. Minutes of the meeting
C. By laws
D. Articles of incorporation

Answer 4

B. Minutes of the meeting

Question 5

Share premium of ordinary shares are included in computing for both contributed capital and legal capital. True or False?

Answer 5

False. Only at contributed capital

Question 6

The highest bidder is one who offers to pay the call price for the least number of shares. True or False?

Answer 6

False. The highest bigger is one who o pay the call price for given amount of shares

Question 7

Appropriation of Accumulated Profits does not affect the corporation’s total Accumulated Profits. True or False?

Answer 7

True

Question 8

Only a memorandum entry is required to determine who are entitled to dividends as of the date of record. True or False?

Answer 8

False. Both a memorandum entry to the journal entry

Question 9

Cash dividends paid decreases total stockholders’ equity. True or False?

Answer 9

False. It doesn’t

Question 10

The final amount in the Statement of Changes in Equity will also be used in another financial statement. True or False?

Answer 10

True