10 Acct. 201
S corporation:
Allows a company to enjoy limited liability as a corporation, but tax treatment as a partnership.
Publicly held corporation:
Allows investment by the general public and is regulated by the Securities and Exchange Commission.
Articles of incorporation:
Describes the nature of the firm's business activities, the shares to be issued, and the composition of the initial board of directors.
Par value:
The legal capital assigned per share of stock.
shares of stock previously sold and returned
Treasury stock
A corporation is
an entity that is legally separate from its owners and even pays its own income taxes.
no par stock
credit common stock
issues shares of common stock for an amount above par
credit to additional paid-in capital and common stock
the contra account used to record a company's repurchase of its own common stock
is the treasury stock
Stockholders' equity means
shareholders' equity
Shares outstanding equals
shares issued minus shares in treasury
shares issued is
shares sold
Duties of the board of directors
Appoint officers to manage the corporation and establish corporate policies
Preferred stock
First to dividends, doesn't have voting rights. Cumulative, convertible (pays dividends not delclared last year), and redeemable (return, re-purchased). Distribution of assets in liquidation and dividents
Privately held corporation:
Does not allow investment by the general public and normally has fewer stockholders.
Limited liability:
Stockholders in a corporation can lose no more than the amount they invested in the company.
Organization chart:
Traces the line of authority within the corporation.
no par value stock is common stock that
not assigned a par value
"dividends in arrears" refers to preferred stock dividents that are
not paid in a given year
Stockholders' equity consists of three primary classifications:
paid-in capital, retained earnings, and treasury stock.
Retained earnings is
the amount of earnings the corporation has kept or retained—that is, the earnings not paid out in dividends.
Invested capital is
the amount of money paid into a company by its owners.
Paid-in capital is
the amount stockholders have invested in the company.
Treasury stock is
the corporation's own stock that it has reacquired
Corp common stock is
treasury stock