9/10/21, 8:45 AM

Question 1 (1 point)
Saionaoi Company was organized on January 1, 2018. On that date it issued 500,000, P10 par
value, ordinary shares at P15 per share. During the period January 1, 2018 through December
31, 2020, Saionaoi reported profit of P3,000,000 and paid cash dividends of P500,000. On
January 5, 2020, Saionaoi purchased 50,000 ordinary shares at P20 per share. On December 31,
2020, 45,000 treasury shares were sold at P30 per share and retired the remaining treasury
shares. What is the total shareholders' equity on December 31, 2020?

Question 2 (1 point)
Saionaini Co. issued 60,000, P50 par value, ordinary shares and 20,000, P100 par value,
preference shares for a total consideration of P7,500,000. At this date, the ordinary share was
selling for P100 per share and the preference share was selling for P150 per share. What amount
of the proceeds should be allocated to the preference shares?

Question 3 (1 point)
At the beginning of the current year, Saionra Co. declared a 1 for 5 reverse share split, when the
market value per share was P100. Prior to the split, the entity had 10,000 sahres of P10 par
value issued and outstanding.
What is the par value of the share after the share split?

Question 4 (1 point)
On July 31, 2011, ACD Corporation purchased 500,000 shares of XYZ Corporation. On
December 31,2012 ACD distributed 250,000 shares of XYZ share as a dividend to ACD's
shareholders. This is an example of a

Stock dividend

Liquidating dividend

Investment dividend

Property dividend

Question 5 (1 point)
 A company issued rights to its existing shareholders to purchase for par unissued shares of
ordinary share with a par value of P10 per share. When the market value of the ordinary
share was P12 per share, the rights were exercised. Ordinary share should be credited at
P10 per share and

Retained earnings credited at P2 per share

No credit made to Additional Paid-In Capital or Retained Earnings

Paid-in Capital from share rights credited at P2 per share

Additional Paid-in capital credited at P2 per share

Question 6 (1 point)
Which is not an element of shareholders' equity?

Retained earnings

Investment in ordinary shares of another company

Revaluation surplus

Treasury shares

Question 7 (1 point)
Loss on retirement of treasury shares shall be debited to

Share premium from treasury shares, share premium from original issuance and then
retained earnings

Retained earnings

Share premium from treasury shares and then retained earnings

Share premium from original issuance, share premium from treasury shares and then
retained earnings.

Question 8 (1 point)
If shares are issued to extinguish a financial liability, what is the initial measurement of the
shares issued?

Fair value of the shares issued

Par value of the shares issued

Fair value of liability extinguished

Book value of the shares issued

Question 9 (1 point)
At the date of financial statements, ordinary share shares issued would exceed ordinary
share shares outstanding as a result of the

Declaration of a share split

Payment in full of subscribed share

Purchase of treasury share

Declaration of a share dividend

Question 10 (1 point)
Which of the following actions or events does not result in an addition to retained earnings?

quasi reorganization

Earnings of net income for the period

Correction of an error in which ending inventory was understated in a previous year

Issuance of a 3-for-1 share split

Question 11 (1 point)
Appropriations of retained earnings should be reported as

Component of equity as part as total retained earnings

 Component of total liabilities as current liability

Component of total Iiabilities as noncurrent liability

Component of equity as part of share premium

Question 12 (1 point)
At the date of the financial statements, shares issued would exceed shares outstanding as
a result of

Declaration of a share dividend

Purchase of treasury shares

Payment in full of subscribed shares

Declaration of share split

Question 13 (1 point)
In accounting for shareholders' equity, the accountant is primarily concerned with which of
the following?

Determining the total amount of shareholders' equity

Distinguishing between realized and unrealized revenue

Making sure that the directors do not declare dividends in excess of retained earnings

Recording the source of each of the various elements of shareholders' equity

Question 14 (1 point)
When the total shareholders' equity is smaller than the amount of contributed capital, this
deficiency is called

A liability

A dividend
 A deficit

Net loss

Question 15 (1 point)
An entity shall measure a liability to distribute noncash asset as dividend to the owners at

Fair value of the asset distributed

Carrying amount of the asset distributed

Either the carrying amount or fair value of the asset

Neither the carrying amount nor fair value

Question 16 (1 point)
A company issued rights to its existing shareholders to purchase, for P30 per share,
unissued shares of P15 par value ordinary share. When the rights lapse

Additional paid-in-capital will be credited

Additional paid-in-capital will be debited

No entry will be made

Share rights outstanding will be debited

Question 17 (1 point)
Loss from sale of treasury shares shall be charged to

Share premium from treasury shares and then retained earnings

Share premium from original issuance, share premium from treasury shares and then
retained earnings

Retained earnings and then share premium from treasury shares

Loss on sale of treasury shares to be reported as other expense

Question 18 (1 point)
A retained earnings appropriation is used to

Smooth periodic income

Restrict earnings available for dividends

Absorb a fire loss when an entity is self-insured

Provide for a contingent loss that is probable and measurable

Question 19 (1 point)
An entity declared a dividend, a portion of which was liquidating. How would this
declaration affect contributed capital and retained earnings, respectively?

Decrease and Decrease

No effect and Decrease

No effect and No effect

Decrease and No effect

Question 20 (1 point)
share dividend

leaves total shareholder's equity

unchanged

leaves total shareholder's equity

unchanged

leaves total shareholder's equity

unchanged
 leaves total shareholder's equity

unchanged

decreases shareholder's equity

answer not given

decreases assets

Question 21 (1 point)
Subscriptions receivable and other receivables from sale of shares which are not collectible
currently shall be presented as

Deduction from the related subscribed share capital in the shareholders' equity section

Current asset

Other asset

Long-term investment

Question 22 (1 point)
Liquidating dividends

Are prohibited under IFRS

Require a credit to share capital

Reduce amounts paid in by shareholders

All of the choices are correct

Question 23 (1 point)
When a portion of shareholders' original investment is returned in the form of a dividend, it
is called a
 liquidating dividend

equity dividend

Property dividend

compensating dividend

Question 24 (1 point)
Famous Company has not declared or paid dividends on its cumulative preference share in
the last three years. These dividends should be reported

As a noncurrent liability

As a reduction in shareholders' equity

In a note to the financial statements

As a current liability

Question 25 (1 point)
The par value of ordinary shares represents

The legal nominal value assigned to the shares

The book value of the shares

The liquidation value of the shares

The amount received by the corporation when the share was originally issued.

Question 26 (1 point)
The entry to record the issuance of ordinary share for fully paid share subscription is

Debit Ordinary Share Subscribed: Credit Ordinary Share

 A memorandum entry

Debit Ordinary Share Subscribed: Credit Ordinary Share and Additional Paid-in Capital

Debit Ordinary Share Subscribed: Credit Subscription Receivable

Question 27 (1 point)
When preference shares are purchased and retired by the issuing entity for less than
original issue price, proper accounting for the retirement

Increases the contributed capital of the ordinary shareholders

Increases the treasury shares

Increases the amount of dividends available to ordinary , shareholders

Increases reported income for the period

Question 28 (1 point)
Which of the following statements is true concerning appropriations of retained earnings? ,

The only proper way to eliminate an appropriation of retained earnings after it has
served its purpose is to revert to the unappropriated retained earnings.

Appropriations do not reduce total retained earnings.

All of these statements are true concerning appropriations of retained earnings.

When treasury shares are purchased, retained earnings must be appropriated equal to
the cost of the treasury shares.

Question 29 (1 point)
How would the declaration of a 20% stock dividend by a Corporation affect it's retained
earnings and total shareholders' equity respectively?

Decrease, decrease

No effect, decrease
 No effect, no effect

Decrease, no effect

Question 30 (1 point)
Which of the following statements is incorrect concerning the appropriations of retained
earnings?

Appropriations of retained earnings reflect funds set aside for a designated purpose,
such as plant expansion.

Appropriations of retained earnings can be made as a result of contractual

requirements.

Appropriations of retained earnings do not change the total amount of shareholders'

equity.

Appropriations of retained earnings can be made at the discretion of the board of

directors.

Question 31 (1 point)
Total shareholders' equity represents

Only the amount of retained earnings.

A claim against a portion of the total assets of an entity.

The maximum amount that can be borrowed by the entity.

A claim against specific assets contributed by the owners.

Question 32 (1 point)
The cost of treasury shares acquired for noncash consideration is usually measured by

Book-value of the shares

Fair value of the noncash consideration ~

 Carrying amount of the noncash asset surrendered

Par value of the shares

Question 33 (1 point)
Select the statements that is incorrect concerning the appropriations of retained earnings:

Appropriations of retained earnings reflect funds set aside for a designated purpose,
such as plant expansion

Appropriations of retained earnings can be made as a result of contractual requirements

Appropriations of retained earnings do not change the total amount of shareholders'

equity

Appropriations of retained earnings can be made at the discretion of the board of

directors

Question 34 (1 point)
When shares without par value are sold the proceeds should be credited to the applicable
share capital account. Alternatively, the excess proceeds over stated value, if any, of the no
par shares may be credited to

Share premium

Ordinary shares

Income

Retained earnings

Question 35 (1 point)
A restriction of retained earnings is most likely to be required by

Incurring a net loss in the prior year

Purchasing treasury share

 Incurring a net loss in the current year

Reissuing treasury share

Question 36 (1 point)
Undistributed share dividends shall be reported as

An addition to share capital outstanding

A current liability

A reduction in total shareholders' equity

A note to financial statements

Question 37 (1 point)
The issuer should charge retained earnings for the fair value of shares issued in a

1 for 5 share dividend

1 for 8 share dividend

4 for 1 share split

2 for 1 share split

Question 38 (1 point)
When an entity issued rights to existing shareholders to purchase unissued ordinary shares
at more than par value, share premium would be recorded when the rights

Become exercisable

Are issued

Are exercised

Lapsed
Question 39 (1 point)
Transaction costs directly attributable to the issuance of new shares include all of the
following, except

Road show presentation

SEC registration fee for new shares

Underwriting fee

Documentary stamp tax

Question 40 (1 point)
Costs of public offering of shares or costs that relate to "stock market listing of shares" should
be

Deducted from equity, net of any related income tax benefit

Deducted from equity

Expensed immediately

Considered as component of other comprehensive income .

Question 41 (1 point)
Which of the following is NOT considered a type of preference share?

Premium preference share

Participating preference share

Redeemable preference share

Cumulative preference share

Question 42 (1 point)
The actual total amount of a cash dividend to be paid is determined on the date of
 Payment

Declaration

Record

Declaration or date of record, whichever is earlier

Question 43 (1 point)
The total cost of treasury stock should be reported as

Deduction from Additional paid in capital

Noncurrent assets

Deduction from stockholders' equity

Deduction from retained earnings

Question 44 (1 point)
Saionagud Co issued 1,000 shares with P5 par to Atty. Abogago as compensation for 500 hours of
legal services performed. Atty. Abogago rate is P320 per hour. On the date of issuance, the share
was quoted on a public exchange at P140. What amount should share premium increase as a result
of the transaction?

Question 45 (1 point)
On December 8, 2020 Cassaion Co. declared a 5% share dividend on 100,000 issued and
outstanding shares of P20 par value, which had a fair value of P50 per share at the date of
declaration. The share dividend was distributed on February 28, 2021. What is the increase in
current liabilities as a result of the share dividend declaration?

Question 46 (1 point)
Saionra Co. provided the following accounts at year end: Issued share capital, P3,000,000;
Subscribed share capital, P1,000,000; Subscription receivable, P600,000; Share premium,
P400,00; Appropriated retained earnings, P400,000; Unappropriated retained earnings,
P200,000; Donated capital, P300,000. What amount should be reported as total
shareholders' equity?
Question 47 (1 point)
Leesudni Company issued 200,000 shares of P100 par, 10% cumulative preference shares for
P25,000,000. One detachable warrant was attached to each preference share issued. Each warrant
gives the holder the right to purchase one ordinary share, P50 par value, for P100. The market
value of the warrant after the preference shares were issued was P15. The proceeds to be allocated
to the preference shares is

Question 48 (1 point)
On June 1, 2020, Massaion Co. was incorporated and was authorized to issue the following:
Common stocks-100 par value, 200,000 shares; Preferred stocks, 10%, P50 par value,
200,000 shares. During the year, the company issued 150,000 common shares for
P18,000,000 and 50,000 preferred shares at P60 per share. In addition, on November 11,
subscriptions for 20,000 preferred shares were taken at P100 per share. 25% of the
subscription were paid and the balance payable February of next year. The income summary
account has a credit balance of 5,000,000. What is the amount of contributed capital on
December 31, 2020?

Question 49 (1 point)
Saionasad Co. issued 8,000 convertible preferred shares with P100 par value at P105. One
preferred share can be converted into three common shares with P25 par value at the option of the
stockholder. Subsequently, all of the preferred shares were converted into common shares. The fair
value of the common shares on the date of conversion was P30. What amount should be credited to
share premium or additional paid in capital as a result of the above transactions.

Question 50 (1 point)
Saionrabai Co. had 80,000 ordinary shares outstanding at the start of the year. The company
distributed a 15% stock dividend in April and another 10% stock in July. After acquiring 10,000
shares of treasury in October, the company split the share 4 for 1 in December. How many ordinary
shares are outstanding at the end of the year?
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Question 10 (1 point)
If the share dividend is less than 20%, what' amount of the retained earnings should be
capitalized? Question 10 options:

Fair value of the shares on the date of record

Par value of the shares
Fair value of the shares on the date of issuance
Fair value of the shares on the date of declaration

Question 11(1 point)

Nonstock dividends shall be recognized as liabilities on the

Date of payment
Date of issuing check
Date of record
Date of declaration