1 which of the following statements about stock dividends


1. Which of the following statements about stock dividends is true?

  • Stock dividends increase the number of shares outstanding.
  • Stock dividends are more valuable than stock splits.
  • Stock dividends are recorded as a reduction in cash.
  • Stock dividends are dividends given in the form of stock from another company.


2. (TCO E) Treasury stock is:

  • investments in government securities.
  • retained earnings that have been appropriated to make equity investments.
  • a company's own stock that it has repurchased.
  • assets held for safekeeping in company's vaults.

3. Which of the following would not be found listed as a liability on a company's balance sheet?

  • Operating lease obligations
  • Capital lease obligations
  • Bonds payable
  • Taxes payable

4. Which of the following is not a component of pension expense?

  • Service cost
  • Interest cost
  • Actual return on plan assets
  • Expected return on plan assets

5. Deferral of unrealized gains or losses may generate major difference between the economic pension cost and the:

  • reported pension.
  • company pension.
  • past pension.
  • post retirement pension.

6. Minority interest appears on the balance sheet of some companies. Minority interest:

  • is classified as a liability.
  • is classified as equity.
  • arises when a company records investments using the equity method.
  • arises when a company owns controlling interest in another company, but less than 100%.

7. Which of the following would be found listed as a liability on a company's balance sheet?

  • Operating lease obligations
  • Projected benefit obligation
  • Purchase commitment obligation
  • Post-retirement benefits other than pension obligation

8. Investing in equity is considered to involve more risk than investing in:

  • stocks.
  • bonds.
  • cash.
  • gold.

9. A lessee must account for a lease as a capital lease if:

  • the lease is shorter than 20 years.
  • the present value of leases is greater than 10% of lessee's assets.
  • the lease is longer than 20 years.
  • None of the above

10. If a company that leases equipment from another company records these leases as operating leases rather than capital leases, its:

  • recorded liabilities will be lower.
  • recorded assets will be higher.
  • total cash flows will be higher.
  • leverage ratios will be higher.

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Finance Basics: 1 which of the following statements about stock dividends
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