Question

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1. Which of the following is false a) If a company skips paying dividends, or pays a dividend smaller than usual, this may cause unhappiness with stockholders. b) Many companies pay no dividends in an effort to conserve cash c) Companies are required to pay dividends at least annually. d) Declaration date, record date, and payment date all dates in connection with dividends. 2. According to the article, United States District Court For the Southern District of New York, how did WorldCom Inc commit fraud? a) Poor internal controls allowed certain employees to write themselves fraudulent checks totaling millions of dollars. b) Improper revenue recognition practices. c) Improperly recording expenses into capitalized accounts d) Using a Ponzi scheme that continuously used investor money to payback other investors. 3. What is an example of a current liability? a) Accounts payable b) Bonds Payable c) Mortgages payable d) Long term notes payable 4. Which of the following is false a) Companies have the option to purchase back their own stock b) Treasury stock increases stockholders' equity c) Shares that have been sold but then later reacquired by the company are known as Treasury Stock d) Companies are not required to pay dividends. 5. Mako Inc had revenues of 57,000 expenses of $38000 this year. If the beginning balance in retained earnings at the beginning of the year. Calculate Mako Inc's ending balance in retained earnings. a) 10,800 b) 113,800 c) 204,000 d) 103,200

Answer 1

1. Option C. Companies are required to pay dividends at least annually.

2. Option C. Improperly recording expenses into capitalized accounts.

WorldCom's CFO fraudulently took billions of dollars in operating expenses and spread them out across so-called property accounts- a type of capital expense account.

3. Option A. Account Payables.

4. Option B. Treasury stock increses shareholder's equity.

5. The question seems to be incomplete as the beginning balance of retained earning is missing there.

Note: The solutions do not need any explaination or calculation.