QUESTION 1

Portfolio equity transactions never decrease net income or retained earnings.

True

False

5 points

QUESTION 2

Compensation expense for a noncompensatory plan is recorded at the end of each employee's vesting period.

True

False

5 points

QUESTION 3

On the declaration date, a large stock dividend requires that the overpaid capital account and the common stock account to be distributed be CR.

True

False

5 points

QUESTION 4

The sale of shares in portfolio below its cost generates a loss that reduces the net income of the company but not the retained earnings.

True

False

5 points

QUESTION 5

RSUs (restricted stock units) that require the distribution of common shares are reported as a capital account during the employee's vesting period.

True

False

5 points

QUESTION 6

When computing basic earnings per share, the conversion effect of some potentially diluting values is ignored.

True

False

5 points

QUESTION 7

SARs (stock appreciation rights) that require the distribution of common shares are reported as a debt account during the period of service (vesting period) of the employees.

True

False

5 points

QUESTION 8

The distribution of a previously declared proprietary dividend has no effect on retained earnings at the time of distribution.

True

False

5 points

QUESTION 9

Preferred stock is called preferred because it usually has two preferences. These preferences relate to

Pair value and dividends

The preemptive right and voting rights

Assets at liquidation and dividends.

Dividends and the preemptive right

5 points

QUESTION 10

The right of preferential or privileged subscription (pre-emptive right) of common shareholders is defined as the right

to participate proportionally in corporate assets in the event of a liquidation

to participate proportionally in any new issue of common shares.

for preferred shareholders to receive dividends before common shareholders.

to exclude preferred shareholders from having the right to vote.