Managerial Accounting MP1 Quarterly Review

What are the units of ownership in a company called?

• bonds

• equities

• stocks

• debentures

What is the term for shares with a nominal value indicated on the certificate?

• nominal value stock

• par value stock

• issued common stock

• convertible stock

Who holds the primary responsibility for making key strategic decisions in a corporation, such as approving mergers?

• board of directors

• employees

• stockholders

• management

A company issues 2,000 shares of common stock for $40,000. The stock has a stated par value of $10 per share. The journal entry to record the stock issuance would include a credit to common stock for:

• $4,000

• $20,000

• $16,000

• $40,000

When common stock is issued above its par value, where should the additional amount be recorded?

• organizational expenses

• common stock account

• additional paid-in capital

• profit from stock issuance

Which of the following is NOT a key date in the process of issuing cash dividends?

• declaration date

• announcement date

• record date

• payment date

What type of stock is typically issued by a corporation if it only has one class of stock?

• preferred stock

• par stock

• organizational stock

• common stock

Equity financing refers to:

• borrowing funds from a bank

• issuing stock

• issuing bonds

• selling on credit

What is a financial instrument that companies use to raise funds by borrowing for a long duration?

• equity

• bond

• debt security

• treasury stock

In the event of a company's bankruptcy, which group is prioritized for payment?

• bondholders

• preferred stockholders

• common stockholders

• board of directors