1. A corporation differs from a proprietorship and a

1. A corporation differs from a proprietorship and a partnership in that

a. a corporation is considered a separate legal entity for taxation purposes.

b. the owners of the corporation do not have a claim on the net assets of the business.

c. assets and liabilities are presented differently on the balance sheet.

d. the cost principle only applies to proprietorships and partnerships.

2. Which of the following statements about small stock dividends is true?

a. A debit to Retained Earnings for the par value of the shares issued should be made. 

b. A small stock dividend decreases total stockholders’ equity 

c. Fair value per share should be assigned to the stock dividend. 

d. A small stock dividend ordinarily will have no effect on book value per share of stock.