Financial Accounting Tools For Business Decision Making 6th Canadian Edition By Kimmel – Test Bank

MATCHING

161. Match the items below by entering the appropriate code letter in the space provided.

A. Stock split F. Retained earnings restrictions
B. Deficit G. Legal capital
C. Payout ratio H. Private corporation
D. Stock dividend I. Cumulative feature
E. Declaration date J. Statement of changes in equity

____ 1. A corporation whose shares are not available on a public stock exchange.

____ 2. The amount that must be retained in the business for the protection of creditors.

____ 3. Preferred shareholders have a right to receive current and unpaid prior year dividends before common shareholders receive any dividends.

____ 4. The date the board of directors formally declares a dividend.

____ 5. Does not affect total share capital, retained earnings, or shareholders’ equity.

____ 6. A pro rata distribution of the corporation’s own shares to shareholders.

____ 7. A portion of the balance is unavailable for dividends.

____ 8. A debit balance in retained earnings.

____ 9. A statement detailing the changes in the components of shareholders’ equity prepared by publicly-traded corporations.

____ 10. Measures the percentage of profit distributed in the form of dividends to common shareholders.

ANSWERS TO MATCHING

1. H

2. G

3. I

4. E

5. A

6. D

7. F

8. B

9. J

10. C