21.Preferred stock has contractual preference over common stock in certain areas.
22.Preferred stockholders generally do not have the right to vote for the board of directors.
23.Dividends in arrears on cumulative preferred stock are considered a liability.
24.Treasury stock is a contra stockholders' equity account.
25.The number of common shares outstanding can never be greater than the number of shares issued.
26.The acquisition of treasury stock by a corporation increases total assets and total stockholders' equity.
27.Treasury stock should not be classified as a current asset.
28.Treasury stock purchased for $35 per share that is reissued at $31 per share, results in a Loss on Sale of Treasury Stock being recognized on the income statement.
29.In published annual reports, subdivisions within the stockholders' equity section are seldom presented, but additional information is frequently included in the footnotes to the financial statements.
30.The term “Capital surplus” can be used instead of “Additional Paid-in Capital”.
31.A successful corporation can have a continuous and perpetual life.
32.Organizational costs are capitalized by debiting an intangible asset entitled Organization Costs.
33.The cash proceeds from issuing par value stock may be equal to or greater than, but not less than par value.
34.The cost of a noncash asset acquired in exchange for common stock should be either the fair value of the consideration given up or the consideration received, whichever is more clearly determinable.
35.Under the cost method, Treasury Stock is debited at the price paid to reacquire the shares, and the same amount is credited to Treasury Stock when the shares are sold.
36.In the stockholders’ equity section, paid-in capital and retained earnings are reported and the specific sources of paid-in capital are identified.