1. All of the following are classified as private sector corporations except:
A.Not-for-profit corporations.
B.Public companies.
C.Public sector corporations.
D.Private corporations.

2. Which one of the following is not a right of shareholders?
A.To share proportionately in profits and losses.
B.To share proportionately in making all management decisions.
C.To share proportionately in corporate assets upon liquidation.
D.To share proportionately in any new issues of shares of the same class.

3. Characteristics of the corporate form of organization include all of the following except:
A.Share capital.
B.Formality of profit distribution.
C.Variety of ownership interests.
D.Unlimited liability of shareholders.

4. Which one of the following statements related to profit distributions is incorrect?
A.Distributions to owners must be in compliance with legislation governing corporations.
B.Distributions to shareholders must be formally approved by the board of directors.
C.Dividends must be in full agreement with capital share contracts as to preferences and participation.
D.All of the statements are correct.

5. Categories of shareholders' equity include all of the following except:
A.Contributed (paid-in) capital.
B.Share capital.
C.Earned share capital.
D.Retained earnings.

6. When a share subscriber defaults, the deposit initially received is:
A.Automatically refunded.
B.Automatically kept by the corporation.
C.Immediately recorded as contributed surplus.
D.Refunded or retained in accordance with prior agreement.

7. Subscriptions Receivable should be reported as:
A.A current asset.
B.An addition to contributed surplus.
C.A deduction from shareholders' equity.
D.Both a and c.

8. Shares issued for property other than cash should be recorded at the:
A.Fair market value of the shares issued.
B.Fair market value of the property received.
C.Par value of the shares issued.
D.Fair market value of the shares or the fair market value of the property received, whichever is more clearly determinable.

9. All of the following are reasons for companies to repurchase or redeem their own shares except:
A.To make a market in the share.
B.To increase the number of shareholders.
C.To increase earnings per share and return on equity.
D.To provide cash distributions to shareholders.

10. When shares are redeemed at an amount less than their assigned value, any difference is credited to:
A.Gain on share redemption.
B.Par value of shares.
C.Contributed surplus
D.Retained earnings.

11. The entry to record the retirement of shares that have been reacquired includes a debit to:
A.Common shares for the redemption amount.
B.Treasury stock for the redemption amount.
C.Common shares for the average assigned value of the redeemed shares.
D.Treasury stock for the par value of the shares.

12. All of the following are features of preferred shares except:
A.Callable at the corporation's option.
B.Convertible into common stock.
C.Preference as to dividends.

13. The most common type of preferred shares are:
A.Non-cumulative preferred shares.
B.Voting preferred shares.
C.Cumulative preferred shares.
D.Participating preferred shares.

14. Retractable preferred shares that must be settled in cash are presented in the balance sheet as:
A.A long-term liability.
B.Part of paid-in capital.
C.A separate amount after retained earnings.
D.A separate amount before the shareholders' equity section.

15. Basic disclosures required with respect to share capital do not include:
A.The authorized number of shares.
B.If the majority of the shares are held by the same party.
C.A description of the share class' rights and privileges.
D.The amount received when the shares were issued.

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