Multiple Choice (Review Materials) Flashcards
When shares are issued for noncash consideration, the equity component shall be recorded at
A. Fair value of the shares issued
B. Book value of the noncash consideration
C. Fair value of the noncash consideration
D. Par value of the shares issued
C. Fair value of the noncash consideration
Which of the following is not the content of the Articles of Incorporation under Revised Corporation Code?
A. The term of existence
B. The number of directors or trustees.
C. The authorized capital share must be subscribed and at least 25% of such subscription must be
paid.
D. Specific purpose or purposes for which the corporation is being incorporated.
C. The authorized capital share must be subscribed and at least 25% of such subscription must be
paid.
The total cost of treasury shares shall be reported as
A. Deduction from Shareholders’ Equity
B. Financial asset
C. Deduction from Accumulated profits
D. Deduction from Share Premium
A. Deduction from Shareholders’ Equity
The purchase of treasury shares
A. Decreases shares authorized
B. Decreases shares issued
C. Decreases shares outstanding
D. Has no effect on shares outstanding
C. Decreases shares outstanding
For reissuance of treasury shares at more than cost, the excess shall be credited to
A. Share premium
B. Gain – other comprehensive income
C. Gain – profit or loss
D. Accumulated profit
A. Share premium
An entity issued what is called a “20% share dividend”. At what amount per share should accumulated profits be reduced for the transaction?
A. Zero
B. Par Value
C. Fair value at the date of declaration
D. Fair value at the date of issuance
B. Par Value
Appropriations of Accumulated profits, if reflected in separate account shall be reported as
A. Component of equity as part of Share premium
B. Component of Equity as part as total accumulated profits
C. Component of total Liabilities as Current Liability
D. Component of Total liabilities as non-current liability
B. Component of Equity as part as total accumulated profits
This is the cut-off date that determines who will receive the dividend.
A. Date of Record
B. Date of payment
C. Date of declaration
D. Date of shipment
A. Date of Record
With regards to dividends, Entries are made on the following
A. Date of record
B. Date of payment
C. Date of order and date of declaration
D. Date of declaration and settlement
D. Date of declaration and settlement
Subscription receivable from sale of shares which are not collectible currently shall be presented as
A. Deduction from the related subscribed share capital under Shareholders’ Equity
B. Current Asset
C. Long-term investment
D. Other Asset
A. Deduction from the related subscribed share capital under Shareholders’ Equity
Total shareholders’ equity represents
A. A claim against specific assets contributed by owners
B. The maximum amount that can be borrowed by the entity
C. A claim against a portion of the total assets of an entity
D. Only the amount of accumulated profits
C. A claim against a portion of the total assets of an entity
Which of the following would have an effect of increasing total Accumulated Profits-Free?
A. Share Premium – Treasury Share
B. Net income
C. Appropriations from accumulated profits
D. Reversals of appropriation
B. Net income
Which of the following items does not affect Accumulated profits – Free?
A. Appropriations for plant expansion
B. Revenue exceeds Expenses for the period
C. Declaration of Dividends
D. Subscription of share capital
D. Subscription of share capital
Undistributed share dividends shall be reported as
A. Current liability
B. An addition to Share Capital outstanding
C. A reduction in Total Shareholders’ Equity
D. A note to Financial Statements
B. An addition to Share Capital outstanding
Contributed Capital does not include
A. Share Premium on Ordinary and Preference Shares
B. Preference Share capital
C. Capital resulting from reissuance of Treasury Shares at a price above acquisition price
D. Capital accumulated by retention of earnings
D. Capital accumulated by retention of earnings
