Self Assessment Quizzes

CHAPTER 21: Section 1 Publicly Held Corporations

	1.	Corporations have several unique features, which are

		a.	legal permission to operate, separate legal entity and stockholders
		b.	separate legal entity , stockholders, board of directors and a legal team
		c.	board of directors, stockholders, legal permission to operate, and separate legal entity
		d.	presidential advisors, legal permission to operate, stockholders, and a board of directors

	2.	If a shareholder cannot attend a stockholders` meeting he or she may send in a

		a.	substitute
		b.	proxy
		c.	ringer
		d.	voting party

	3.	A corporation issued 10,000 shares of $10 par common stock at $12 a share. The journal entry would be

		a.	debit Cash in Bank $100,000, debit Paid-in Capital in Excess of Par $20,000, credit Common Stock $120,000
		b.	debit Cash in Bank $120,000, credit Common Stock $120,000
		c.	debit Common Stock $100,000, debit Paid-in Capital in Excess of Par $20,000, credit Cash in Bank $120,000
		d.	debit Cash in Bank $120,000, credit Common Stock $100,000, credit Paid-in Capital in Excess of Par $20,000

	4.	Preferred stock has certain advantages over common stock such as

		a.	voting privileges, dividend distribution prior to common stock, and preference over common stockholders to company assets should the corporation go out of business
		b.	dividend distribution prior to common stock, preference over common stockholders to company assets should the corporation go out of business, and participation in the control of the corporation
		c.	voting privileges, dividend distribution prior to common stock, and participation in the control of the corporation
		d.	dividend distribution prior to common stock, and preference over common stockholders to company assets should the corporation go out of business

	5.	The maximum number of shares a corporation may issue is called its

		a.	issued capital stock
		b.	authorized capital stock
		c.	capital stock
		d.	authorized common stock

	6.	Stockholders own a corporation, but to manage it they elect a

		a.	management team
		b.	management board
		c.	board of directors
		d.	direct managers

	7.	A corporation owned by a few persons or by a family is called a

		a.	tightly held corporation
		b.	family business
		c.	closely held corporation
		d.	private enterprise

	8.	If a corporation issues only one class of stock it is called

		a.	common
		b.	preferred
		c.	class A
		d.	stock

	9.	A corporation whose stock is widely held, has a large market, and is usually traded on the New York Stock Exchange, the American Stock Exchange, or NASDAQ is called a

		a.	publicly held corporation
		b.	public domain
		c.	private enterprise
		d.	starship Enterprise

	10.	The amount assigned to each share of stock is its

		a.	par value
		b.	stated value
		c.	common value
		d.	limited value