LSUS- Acct 701 Module 6
Earnings Per Share (EPS)
Earnings to the common stockholders on a per share basis, computed as income available to common stockholders divided by the weighted average number of common shares outstanding
Board of Directors
Elected by the stockholders to have primary responsibility for formulating policies for the corporation. Also authorizes contracts, declares dividends, establishes executive salaries, and grants authorization to borrow money.
Callable Preferred Stock
If the stock is nonconvertible, it must be surrendered to the company when the holder is requested to do so. If the stock is convertible, it may be either surrendered or converted into common shared when called.
Treasury Stock
Share of capital stock issued and reacquired by the issuing corporation; they have not been formally canceled and are available for reissuance.
Common Stock
Shares of stock representing the residual equity in the corporation. If only one class of stock is issued, it's known as common stock. All other claims rank ahead of common stockholders' claims
Book value per share
Stockholders' equity per share; the amount per share each stockholder would receive if the corporation were liquidated without incurring any further expenses and if assets were sold and liabilities liquidated at their recorded amounts.
retained earnings
That part of stockholders' equity resulting from accumulated earnings; the account to which the results of corporate activity, including prior period adjustments, are carried and to which dividends and certain items resulting from capital transactions are charged.
Paid-In Capital- Common (preferred) Treasury Stock Transactions
The account credited when treasury stock is reissued for more than its cost; this account is debited to the extent of its credit balance when such shares are reissued at less than cost.
Liquidation Value
The amount a stockholder will receive if a corporation discontinues operations and liquidates by selling its assets, paying its liabilities, and distributing the remaining cash amount the stockholders.
Discount on Capital Stock
The amount by which the par value of shares issued exceeds their issue price. The original issuance of shares at a discount is illegal in most states.
Articles of incorporation
The application for the corporation's charter
Price-Earnings ratio
The current market price per share of common stock divided by EPS
Date of payment (of dividends)
The date of actual payment of a dividend or issuance of additional shares for a stock dividend.
Date of record (of dividends)
The date of record established by the board that determines the stockholders who will receive dividends.
Date of declaration (of dividends)
The date the board of directors takes action in the form of a motion that dividends be paid
Call Premium (on preferred stock)
The difference between the amount at which a corporation calls its preferred stock for redemption and the par value of the stock
Capital Stock Authorized
The number of shares of stock that a corporation is entitled to issue as designated in its charter
Capital Stock Issued
The number of shares of stock that have bee sold and issued to stockholders.
Retained Earnings
The part of stockholders' equity resulting from net income, reduced by dividends and net losses.
Redemption Value
The price per share at which a corporation may call in (or redeem) its capital stock for retirement
Market Value
The prices at which shares of capital stock are bought and sold in the market
Preemptive Right
The right of stockholders to buy additional shares in a proportion equal to the percentage of shares already owned.
Stock Dividend Distributable - Common Account
The stockholders' equity (paid-in capital) account that is credited for the par or stated value of the shares distributable when recording the declarations of a stock dividend
Capital stock
Transferable units of ownership in a corporation
Stock Transfer Agent
Typically, a bank or trust company employed by a corporation to transfer stock between buyers and sellers.
Stock Registrar
Typically, a bank that maintains records of the share outstanding for a company
Shares of Stock
Units of ownership in a corporation
Net-of-tax effect
Used for discontinued operations, extraordinary items, changes in accounting principle, and prior period adjustments, whereby items are shown at the dollar amounts remaining after deducting the effects of such items on income taxes, if any, payable currently
Cumulative Preferred Stock
Preferred stock for which the right to receive a basic divided accumulates if any dividends have not been paid; unpaid cumulative preferred dividends must be paid before any dividends can be paid on the common stock.
Noncumulative preferred stock
Preferred stock on which the right to receive a dividend expires if the dividend is not declared.
Convertible preferred stock
Preferred stock that is convertible into common stock of the issuing corporation
Donated Capital
Results from donation of assets to the corporation, which increases stockholder's equity
Liquidating dividends
Dividends that are a return of contributed capital not a distribution chargeable to retained earnings.
bylaws
A set of rules or regulations adopted by the board of directors of a corporation to govern the conduct of corporate affairs. The bylaws must be in agreement with the laws of the state and the policies and purposes in the corporate charter.
Deficit
A debit balance in the retained earnings account
Stock Split
A distribution of 100% or more of additional shares of the issuing corporation's stock, accompanied by a corresponding reduction in the par value per share. The purpose is to cause a large reduction in the market price per share of the outstanding stock.
Dividend
A distribution of assets (usually cash) that represents a withdrawl of earnings by the owners.
Proxy
A legal document signed by a stockholder, giving another person the authority to vote the stockholder's shares at the stockholders' meeting
Return on Average Common Stockholders' Equity
A measure of the income-producing ability of the company. It is the ratio of net income available to common stockholders divided by average common stockholders' equity.
Stock Certificate
A printed or engraved document serving as evidence that the holder owns a certain number of shares of capital stock
Paid-in Capital
All of the contributed capital of a corporation, including that carried in capital stock accounts.
Paid-In Capital
Amount of stockholders' equity that normally results from the cash or other assets invested by owners; it may also result from services provided for shares of stock and certain other transactions.
Legal Capital (stated Capital)
An amount prescribed by law (usually the par value or stated value of shares issued) below which a corporation may not reduce stockholders' equity through the declaration of dividends or other payment to stockholders.
Stated Value
An arbitrary amount assigned by the board of directors to each share of a given class of no-par stock.
Par Value
An arbitrary amount assigned to each share of a given class of stock and printed on the stock certificate.
Corporation
An entity recognized by law as possessing an existence separate and distinct from its owners; that is, it is a separate legal entity. It is granted many of the rights, and placed under many of the obligations, of a natural person. In any given state, all corporations organized under the laws of that state are domestic corporations; all others are foreign corporations.
Stock Dividends
Dividends that are payable in additional shares of the declaring corporation's capital stock
Unissued Share
Capital Stock authorized but not yet issued.
Preferred Stock
Capital Stock that carries certain features or rights not carried by common stock. May be preferred as to dividends, as to assets, or as to both. May be callable and or convertible and may be cumulative or non cumulative.
No-par Stock
Capital Stock without par value, to which a stated value may or may not be assigned.
Paid-in Capital in excess of par (or stated) value- common or preferred.
Capital contributed to a corporation in addition to that assigned to the shares issued and recorded in capital stock accounts.
Cash Dividends
Cash distributions of accumulated earnings by a corporation to its stockholders
Changes in Account Principles
Changes in accounting methods pertaining to such items as inventory
Prior period adjustments
Consist almost entirely of corrections of errors in previously published financial statements. Reported in the statement of retained earnings net of their tax effects, if any
Stockholders' Ledger
Contains a group of subsidiary accounts showing the number of shares of stock currently held by each stockholder
Organization Costs
Costs of organizing a corporation, such as incorporation fees and legal fees applicable to incorporation.
Dividends in arrears
Cumulative unpaid dividends, including quarterly dividends not declared for the current year
Dividends
Distribution of earnings by a corporation to its stockholders
Extraordinary items
Items both unusual in nature and infrequent in occurrence; reported in the income statement net of their tax effects, if any.
Stock preferred as to assets
Means that in liquidation, the preferred stockholders are entitled to receive the par value (or a larger stipulated liquidation value) per share before any assets may be distributed to common stockholders.
Stock preferred as to dividends
Means that the preferred stockholders are entitled to receive a specified dividend per share before any dividend on common stock is paid.
Income Available to common stockholders
Net income less and dividends on preferred stock
Incorporators
Persons seeing to bring a corporation into existence
statement of retained earnings
a formal statement showing the items causing changes in unappropriated and appropriated retained earnings during a stated period of time.
statement of stockholders' equity
a summary of the transactions affecting the accounts in the stockholders' equity section of the balance sheet during a stated period of time.
Corporate Charter
the contract between the state and the incorporators of a corporation, and their successors, granting the corporation its legal existence.
retained earnings appropriations
contractual or voluntary restrictions or limitations on retained earnings that reduce the amount of dividends that may be declared.
Dividend on preferred Stock
the amount paid to preferred stockholders as a return for the use of their money; usually a fixed or stated amount expressed in dollars per share or as a percentage of par value per share.
Capital Stock Outstanding
the number of shares of authorized stock issued and currently held by stockholders
Minutes Book
the record book in which actions taken at stockholders' and board of directors' meetings are recorded; the written authorization for many actions taken by corporate officers.