IA Finals

Question 1

Ownership depends on the amount of shares. And there is an economic transaction

Answer 1

Issuance of Shares

Question 2

I. Date of Record
II. Date of Payment
III. Date of Declaration
In relation to corporate dividends, arrange the above dates in chronological order.

Answer 2

III
I
II

Question 3

The entry to record a donation of equipment from an internal donor includes _______.
a) a debit to donated capital account

b) a credit to donated capital account

c) a debit to donated income account

d) a credit to donated income account

Answer 3

b) a credit to donated capital account

Question 4

Refers to the amount of money a company receives in excess of the par value or stated value of its shares.

Answer 4

Share Premium

Question 5

It is the maximum number of shares that can be issues. It has no economic transaction.

Answer 5

Authorized Capitalization (Memorandum Entry)

Question 6

The sum of a company’s earning over a period of time after deducting dividends.

Answer 6

Retained Earnings

Question 7

A partner is considered ______ if his personal assets exceed his personal liabilities.

Answer 7

Solvent

Question 8

The entry to record a donation of equipment from an external donor includes ______.
a) a debit to donated capital account

b) a credit to donated capital account

c) a debit to donated income account

d) a credit to donated income account

Answer 8

d) a credit to donated income account

Question 9

This refers to the change in partnership relations.

Answer 9

Partnership Dissolution

Question 10

Admission of a new partner can be done through ____.
a) Purchase

b) Investment

c) Sale

d) Either A or B

Answer 10

d) Either A or B

Question 11

It is the sum of the capital balances of the old partners and the actual investment of the new partner.

Answer 11

Total Contributed Capital

Question 12

It has no voting rights, priority in dividends, par value only

Answer 12

Preference Shares (Preferred Stock)

Question 13

Cash priority program is prepared
a) Each time cash is distributed to partners in an installment liquidation

b) Each time a non-cash asset is realized

c) To determine the order and amount of cash each partner will receive as it comes available for distribution

d) All of the above

Answer 13

C

Question 14

It is the total capital of the partnership after considering capital credits given to each of the partners.

Answer 14

Total Agreed Capital

Question 15

This class of corporation issues shares or stocks, business or profit-oriented and the profit can be distributed to stockholders.

Answer 15

Stock Corporation

Question 16

This is the process whereby assets are realized on a piecemeal bases and cash is distributed to partners on a periodic bases as it becomes available even before all non-cash assets are realized.

Answer 16

Installment Liquidation

Question 17

The minimum amount of money that a company must have in order to protect its creditors.

Answer 17

Legal Capital

Question 18

This signifies a unit of equity ownership in a company.

Answer 18

Shares

Question 19

This refers to a situation wherein a new person joins an existing partnership, which causes the same to be dissolved.

Answer 19

Admission of a new partner

Question 20

This class of shares has voting rights. If there is one issuance only, it should be this type of share because it has voting rights. It may be stated or par value.

Answer 20

Ordinary Shares (Common Shares)

Question 21

Shares can be issued at an amount _______.

Answer 21

equal to its par value or higher than its par value

Question 22

This refers to all the shares issued and sold by a company that are not held by the company itself, including a company’s common stock held by individual investors, institutional investors and restricted shares held by company officers and insiders.

Answer 22

Outstanding Shares

Question 23

This class of corporation has no shares, more on purpose than profit, the profit is not distribured to owners, and use their profit in operating or charity.

Answer 23

Non-Stock Corporation

Question 24

This is prepared every time the partnership plan to distibute cash during an installment liquidation.

Answer 24

Schedule of Safe Payments

Question 25

________ are shares issued and reaquired by the corporation.

Answer 25

Treasury Shares

Question 26

This is a process whereby the distribution of cash to partners is done only after all the non-cash assets have been realized and the obligation with the partnership outside creditors have been settled.

Answer 26

Lump sum liquidation

Question 27

The process of converting non-cash into cash.

Answer 27

Realization

Question 28

______ partner is one whose personal liabilities exceed his personal assets.

Answer 28

Insolvent

Question 29

Which of the following does not affect the partnership capital before and after dissolution

Answer 29

Admission of a new partner by purchase

Question 30

This refers to the nominal value of a share or stock which can be seen in the articles of incorporation or stock certificate.

Answer 30

Par Value

Question 31

This refers to the winding up of partnership affairs.

Answer 31

Partnership Liquidation

Question 32

In share subscription, share capital is credited upon ______.

Answer 32

Full payment

Question 33

Is an artificial being created by operation of law having the right of succession and the powers, attributes, and properties expressly authorized by law or incidental to its existence.

Answer 33

Corporation

Question 34

The national government regulatory agency charged with supervision over the corporate sector.

Answer 34

SEC

Question 35

The money a company raises by issuing common or preferred stock.

Answer 35

Share Capital