Multiple Choice: Elements of Equity Select the correct answer for each of the following:

1, Which of the following is not an element of owners’ equity?

a. Capital stock.

b. Creditors’ capital.

c. Additional paid-in capital.

d. Retained earnings.

2. Preferred stock:

a. Must be paid dividends before interest is paid to bondholders.

b. Usually has the right to vote along with common stockholders.

c. Usually has preference over common stock in receiying dividends.

d. All of the above.

3. The true residual ownership of a corporation is found in the company’s:

a. Preferred stock.

b. Common stock.

c. Treasury stock.

d. Authorized stock.

All business corporations have:

a. Stock options.

b. Preferred stock.

c. Common stock.

d. All of the above.

5. Additional paid-in capital includes:

a. Amounts paid to the corporation in excess of the market value of its stock.

b. Gains on the issuance of capital stock.

. Gains on the retirement of capital stock.

d. Amounts paid to the corporation in excess of the par or stated value of its stock.