Which one of the following disclosures should be made in the equity section of the balance sheet, rather than in the notes to the financial statements

Which one of the following disclosures should be made in the equity section of the balance sheet, rather than in the notes to the financial statements?

a. Dividend preferences
b. Liquidation preferences
c. Call prices
d. Conversion or exercise prices


Answer: Liquidation preferences

The rate of return on common stock equity is calculated by dividing 

a. net income less preferred dividends by average common stockholders' equity.
b. net income by average common stockholders' equity.
c. net income less preferred dividends by ending common stockholders' equity.
d. net income by ending common stockholders' equity.


Answer: net income less preferred dividends by average common stockholders' equity

What effect does the issuance of a 2-for-1 stock split have on each of the following?

Par Value per Share Retained Earnings


a. No effect No effect
b. Increase No effect
c. Decrease No effect
d. Decrease Decrease


Answer: Decrease No effect