Quizes questions of accounting

Q.N.1.
Green belt Corporation was organized with authorization to issue 100,000 shares
of Rs. 1 par value common stock. 40,000                 shares
were issued to Gajendra Silwal, the company’s founder, at a price of Rs. 5per
share. No other shares have yet been                 issued: 

1. Gajendra owns of the stockholder’s equity of the corporation.


2. The corporation should recognize a Rs. 160,000 gain on the issuance of these shares.


3. In the balance sheet includes retained earnings of Rs. 50,000, total paid-in capital amounts to Rs. 250,000.


4. In the balance sheet, the Additional paid-in capital account will have a Rs. 160,000 balance regardless of the profits earned or losses incurred since the corporation was organized.

Q.N.2.  Which of the following is not the
characteristics of the common stock of a large, publicly owned corporation?

A.      The shares may be
transferred from one investor to another without disrupting the continuity of
business operations.

B.      Voting rights in the
election of the board of directors. Outstanding pension cost account.

C.      A cumulative right to
received dividends.

D.      After issuance, the market
value of the stock is unrelated to its par value.

Q.N.
3. Stock for which holders have a right to dividends in arrears before the
current-gear dividend is distributed                 are___________________________

Q.
N. 4. _______________ is a provision allowing the preferred stockholders to
share, on a percentage basis, in the distribution of        an abnormally large dividend.

Q.
N. 5. If the company reissues 500 shares of treasury stock that has been
reacquired at Rs. 12 per share previously for Rs. 18 per                 share, the entry is: 

A.      Cash – Dr…………………….9,000

                    To Treasury Stock………………………………….…7,500

                    To Additional paid in capital – Treasury
stock……….1,500

B.      Cash – Dr……………………..9,000

                    To Treasury Stock…………9,000

                   

C.      Cash – Dr……………………..9,000

                    To Treasury Stock…………………...…5,000

                    To Retained Earnings………….……….4,000

D.      Cash – Dr……………………..9,000

                    To Treasury Stock……………...……….7,500

                    To Retained earnings…………..……….1,500