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