Accounting chap 9 extra credit questions

corporations may be _____ held or _______ held

public or private

true or false : a journal entry is made to record the number of authorized shares.

false

the most important advantage to the corporate form of business is

limited liability

the terms "effective interest rate" and "yield rate"refer to the :

market interest rate

when a corporation repurchases its bonds from the bondholders, the bonds are called:

retired bonds

date of record:

stock records are finalized to determine which stockholders are to receive payment

the term treasury stock refers to

stock that is repurchased by the issuing corporation

declaration date:

the board of directors officially approves a dividend

when a business incorporates, it must file its ________ with the state in which it incorporates

articles of incorporation

a bond will be issued at a discount when the market rate of interest is

greater than the stated rate

bonds will be issued a premium if the stated interest rate is

greater than the value market interest rate

the lower the market interest rate on bonds, the ________ will be on the bond issue price

higher

___________ capital is the amount of money paid into a company by its owners

invested

Treasury stock :

is a contra equity account, has a negative equity balance, and is shares of stock no longer outstanding

corporations raise capital by

issuing stock and issuing debt

A series of equal amounts paid or received over equal time periods is called an

annuity

the total number of shares that a company may sell is referred to as

authorized shares

preferred stock tends to have attributes of

both bonds and common stock

investment capital is also:

common stock

the discount on bonds payable is classified as:

contra liability

when a corporation issues shares of common stock for an amount above par, which of the following entries occur?

credit common stock and additional paid in capital

when does a corporation record an increase in dividends payable?

declaration date

retained earnings are :

decreased by dividends, sometimes called earned capital, increased by net income, all of the company's earnings not distributed to stockholders

market rates of bonds vary depending on the _________ risk of the company issuing the bonds

default

the possibility that a company will be unable to pay its bonds payable and the related interest when due is commonly referred to as

default risk

payment date:

dividends payable is decreased

the carrying value at maturity is equal to the face amount of bonds issued at:

face value x discount x premium

A ________ balance in retained earnings indicates an accumulated deficit

debit

special contractually granted features can make preferred stock:

redeemable convertable and cumulative

earned capital is also:

retained earnings

the declaration of cash dividends reduces

retained earnings

a corporation is owned by its

stockholders

the contra account used to record a company's repurchase of its own common stock is the _______ stock account

treasury

a current dividend preference requires that

preferred dividends must be paid before any dividends are paid to common stock holders

shares of stock previously sold by the corporation that are repurchased is called

treasury stock

additional taxes and more paperwork are the two primary disadvantages of this business form:

corporation

double taxation is a disadvantage for

corporations

the advantages to the corporate form of business include

transferability of ownership and ease of raising capital