Ateneo de Manila University

• MANAGEMENT mm2013

• 1. The maximum number of shares of stock that the government gives a corporation permission to issue is the a. Granted shares b. Authorized shares c. Issued shares d. Outstanding shares B. Authorized shares 2. A preference share capital that may be exchanged for ordinary share capital is known as a. Cumulative b. Participating c. Noncumulative d. Convertible D. Convertible 3. A noncash asset received in exchange for share capital is recorded at a. its book value b. its fair market value c. the lower of its book value or fair market value d. the higher of its book value or fair market value B. Its Fair market value 4. On June 1, authorized ordinary share capital was sold on a subscription basis at a price in excess of par value, and 40% of the subscription price was collected. On October 1, the remaining 60% of the subscription price was collected. Ordinary share premium will be credited on: a. June 1 only b. October 1 only c. June 1 and October 1 d. Neither June 1 nor October 1 A. June 1 only 5. When shares without par value are sold, the proceeds shall be credited to a. Share capital b. Shareholder’s Equity c. Share capital to the extent of the stated value and any excess is credited to share premium d. Share premium c. Share capital to the extent of the stated value and any excess is credited to share premium 6. If shares are issued for noncash consideration, the proceeds shall be measured by the: a. Fair value of the shares issued b. Fair value of the noncash consideration received c. Par value of the shares issued d. Cost of the noncash consideration received