Accounting Chapter 11

A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive any dividends.

Cumulative dividend

The date when ownership of outstanding shares is determined for dividend purposes.

Record Date

Net income that retained the business,

Retained Earnings

Capital stock that has been assigned value per share in the corporate charter.

Outstanding stock

Capital stock that has been issued and is being held by stockholders.

Outstanding stock

Capital stock that has contractual preferences over common stock certain areas.

Preferred stock

4. A corporation that may have thousands of stockholders and whose stock is regularly traded on national securities market.

Publicly held corporation

7. A corporation's own stock that has been issued, fully paid for, and reacquired by the corporation but not retired.

Treasury stock

All of the following statements are true concerning treasury stock except: a. is accounted for by the cost method. b. does not change the number of shares issued. c. does not change the number of shares outstanding. d. reduces stockholder claims on corporate assets.

c. does not change the number of shares outstanding.

All the following are true about a corporation except: a. must abide by the laws. b. is a legal entity. c. has the right to vote. d. must pay taxes.

c. has the right to vote

Dividends can take the following forms: a. cash b. property c. script d. all of the above

d. all of the above

Corporations issue stock dividends a. to satisfy stockholders' dividend expectations without spending cash. b. to increase the marketability of its stock by increasing the number of shares outstanding and thereby decreasing the market price per share. c. to emphasize that a portion of stockholders' equity has been permanently reinvested in the business and therefore is unavailable for cash dividends. d. all of the above.

d. all of the above.

In order to pay a cash dividend: a. the corporation must have adequate retained earnings. b. the board of directors must declare a dividend. c. the corporation must have adequate cash. d. all of the above.

d. all of the above.

A small stock dividend a. is less than 20%-25% of the corporation's issued stock. b. is recorded at market value per share. c. is recorded at par or stated value per share. d. both a and b above.

d. both a and b above.

A stock dividend results in: a. a decrease in retained earnings. b. an increase in paid-in capital. c. a decrease in stockholder's equity and total assets. d. both a and b above.

d. both a and b above.

Upon receiving a stock dividend: a. a stockholder owns more shares. b. a stockholder's interest has increased. c. a stockholder's interest has not changed. d. both a and c above.

d. both a and c above.

amount per share of stock that must be retained the business for protection of corporate creditors.

legal capital

Proof of stock ownership is evidenced by a printed or engraved form known as a:

stock certificate

When issuing cash dividends, the board of directors commits the corporation to a binding legal obligation on:

the declaration date.