1.

(1) Which of the following situations will cause the Share Premium account to
increase?
a. Declaration of property dividends where the fair values of the non-cash assets
is greater than its carrying amount.
b. Declaration of large share dividends.
c. Declaration of small share dividends.
d. Declaration of share split.

2. (1) When dividends are declared, which date will cause the retained earnings to be
debited/decreased?
a. Date of declaration
b. Date of payment
c. Date of record
d. Date of issuance of certificate of registration

3. (1) Which of the following will apply to dividends?

a. The dividend is a liability account.
b. The corporation may not have sufficient cash even it has sizable amount of
retained earnings.
c. The corporation can declare cash dividends greater than its retained earnings
balance.
d. It is an annual obligation of the corporation to shareholders.

4. (1) ABC Corporation has 200,000 ordinary shares authorized, 150,000 shares issued
and 120,000 shares outstanding. When the board of directors declare a 10% share
dividends, this is base on
a. 200,000 shares authorized.
b. 50,000 unissued ordinary shares.
c. 120,000 shares outstanding.
d. 150,000 shares issued.

5. (1) Which of the following accounts is not classified like the others?
a. Property Dividends Payable
b. Share Dividends Payable
c. Salaries Payable
d. Cash Dividends Payable

6. (1) Which of the following situations in declaring small share dividends the shares
will be measured using the fair market values?
a. For small share dividends, always use its par values regardless its fair market
values.
b. Do not use fair market values when par values of the shares are known.
 c. Fair values of the shares are less than its par value.
d. Fair values of the shares are greater than its par value.

7. (1) Which of the following, when the board of directors declared, will not cause the
retained earnings to change its amount?
a. Small Share dividends
b. Share Split
c. Sale of treasury stock more than its cost.
d. Change from P20 Par Value Ordinary Shares to No-par value P10 stated value
Ordinary Shares

8. (1) Which of the following, when the board of directors declared, will cause the total
shareholders' equity to change its amount?
a. Large share dividends
b. Small share dividends
c. Share Split
d. Property dividends

9. (1) Which of the following is correct about retained earnings?

a. As of end of 2019, the corporation has deficit P500,000. At end of 2020, the
board of directors planned to declare P1,000,000 after making P1.2 million net
profit.
b. The corporation with P250,000 Retained Earnings balance may recapitalize its
10,000 ordinary shares no-par P50 stated value to P80 par value.
c. A substantial amount of retained earnings means a corporation has substantial
amount of cash.
d. Retention of assets generated from profitable activities of the corporation.
e. Other:
10. (1) Which of the following will not apply to prior period errors?
a. The error(s) discovered were significant that must be adjusted.
b. The error(s), regardless of amount, need not be adjusted.
c. The error(s) discovered pertain to prior accounting period(s).
d. The error was discovered in the current year.

11. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
Cumulative and Participating preference shares and P10 par value 100,000 ordinary
shares outstanding, and P500,000 Retained Earnings after reporting P2,000,000 in the
current year. No dividends were declared in 2018 and 2019. If ordinary shareholders
received P1.00 per share, what is the balance of retained earnings after the declaration
of dividends in 2020?
a. Zero
b. P340,000
c. P400,000
d. P180,000
12. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
Cumulative and Participating preference shares and P10 par value 100,000 ordinary
shares outstanding, and P500,000 Retained Earnings. No dividends were declared in
2018 and 2019. If ordinary shareholders received P1.00 per share, how much is the
total dividends declared?
a. P280,000
b. P320,000
c. P500,000
d. P160,000

13. (2) When the corporation has no dividends in arrear(s), a non-cumulative and
non-participating preference shareholder will receive the same amount of dividend per
share with different type of preference shareholders such as
a. Non-cumulative and participating preference shareholders.
b. Non-cumulative and non-participating preference shareholders.
c. Cumulative and non-participating shareholders.
d. Cumulative and participating preference shareholders.

14. (2) At end of December 31, 2019, BSBA Corporation reported 100,000 shares P10
par value ordinary shares outstanding, Share Premium at P400,000 and Retained
Earnings P500,000. On January 31, 2020, the corporation received 10,000 BSBA
Ordinary Shares from its shareholders; declared on April 30, 2020 two shares for
every one share held share split, on September 30, 2020 sold 10,000 treasury stock at
P60,000 and earned P500,000 profit. What is the book value per share on December
31, 2020?
a. P19.00
b. P 9.50
c. P10.56
d. P10.00

15. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
Cumulative and Participating preference shares and P10 par value 100,000 ordinary
shares outstanding, and P500,000 Retained Earnings. No dividends were declared in
2018 and 2019. If ordinary shareholders received P1.00 per share, how much is the
dividend per preference share?

a. P 60.00
b. P 1.00
c. P220.00
d. P180.00

16. (2) On December 31, 2020, BSBA Corporation has P10 par value ordinary shares,
200,000 shares authorized and 100,000 shares issued and outstanding, and P500,000
 Retained Earnings after reporting P2,000,000 in the current year. The fair market
value is P15.00 per ordinary share. If 20% share dividend is declared, the amount of
total shareholders' equity after declaration is
a. P1,700,000
b. P1,500,000
c. P1,800,000
d. P1,300,000

17. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
Cumulative and Participating preference shares and P10 par value 100,000 ordinary
shares outstanding, and P500,000 Retained Earnings after reporting P2,000,000 in the
current year. No dividends were declared in 2018 and 2019. If ordinary shareholders
received P1.00 per share, what is the balance of total shareholders' equity after the
declaration of dividends in 2020?
a. P2,400,000
b. P2,180,000
c. P2,340,000
d. P4,400,000

18. (2) The corporation is authorized to issue P10 par value 100,000 ordinary shares. On
December 31, 2020, there are 50,000 ordinary shares issued and 5,000 ordinary
treasury stock, and the board of directors declared P100,000 cash dividends from its
P250,000 retained earnings. How much is dividend per ordinary share?
a. P 2.22
b. P 1.00
c. P20.00
d. P 2.00

19. (2) At end of December 31, 2019, BSBA Corporation reported 100,000 shares P10
par value ordinary shares outstanding, Share Premium at P400,000 and Retained
Earnings P500,000. On January 31, 2020, the corporation received 10,000 BSBA
Ordinary Shares from its shareholders; declared on April 30, 2020 two shares for
every one share held share split, on September 30, 2020 sold 10,000 treasury stock at
P60,000 and earned P500,000 profit. How many shares are outstanding on December
31, 2020?
a. 100,000 shares
b. 190,000 shares
c. 200,000 shares
d. 180,000 shares

20. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
Cumulative preference shares and P10 par value 100,000 ordinary shares outstanding,
and P250,000 Retained Earnings. No dividends were declared in 2018 and 2019. If
P200,000 is declared as cash dividends, how much is the dividend per ordinary share?
 a. P 0.80
b. P 2.00
c. P 0.20
d. P 1.40

21. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
preference shares and P10 par value 100,000 ordinary shares outstanding, and
P250,000 Retained Earnings. No dividends were declared in 2018 and 2019. If
P100,000 is declared as cash dividends, how much is the dividend per preference
share?
a. P 0.40
b. P 1.00
c. P 60.00
d. P100.00

22. (2) On December 31, 2020, BSBA Corporation has P10 par value ordinary shares,
200,000 shares authorized and 100,000 shares issued and outstanding, and P500,000
Retained Earnings after reporting P2,000,000 in the current year. The fair market
value is P15.00 per ordinary share. If 10% share dividend is declared, the amount of
total shareholders' equity after declaration is
a. P1,350,000
b. P1,500,000
c. P1,650,000
d. P1,600,000

23. (2) Which of the following is not applicable?

a. The corporation may have 2,000 shares P1,000 par value preference shares
and 100,000 shares no-par value ordinary shares.
b. The corporation may have 2,000 shares P1,000 par value preference shares
and 100,000 shares P10 par value ordinary shares.
c. The corporation may have 2,000 shares P1,000 par value preference shares
only.
d. The corporation may have 100,000 shares P10 par value ordinary shares only.

24. (2) On December 31, 2020, BSBA Corporation has P1,000 par value 6% 1,000
Cumulative and Participating preference shares and P10 par value 100,000 ordinary
shares outstanding, and P500,000 Retained Earnings. No dividends were declared in
2018 and 2019. If P250,000 is declared as cash dividends, how much is the dividend
per ordinary share?
a. P 1.90
b. P 0.65
c. P 0.70
d. P 0.60
25. (2) When the corporation regularly declares dividends, a non-cumulative and
non-participating preference shareholders will receive the same dividends per share
with different type of preference shareholders such as
a. Cumulative and participating preference shareholders.
b. Cumulative and non-participating shareholders.
c. Non-cumulative and participating preference shareholders.
d. Non-cumulative and non-participating preference shareholders.