ACTY 2100: SB 10

The advantages to the corporate form of business include

transferability of ownership. ease of raising capital.

AnuU, Inc. sold 100,000 shares of the 1,000,000 shares it is allowed to sell. AnuU repurchased 10,000 of these shares. The number of shares issued equals ______ shares.

100,000

Bagel, Inc. issued 50,000 shares of the 100,000 authorized. It has since repurchased 5,000 of its shares. The number of shares outstanding equals ______ shares.

45,000

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

invested

The amount of money paid into a company by its owners is referred to as:

invested capital

Another common term for stockholders' equity is:

shareholders' equity

The number of shares issued represents the number of shares:

sold

A corporation is owned by its

stockholders

Which of the following are included in the duties of the board of directors?

Appoint officers to manage the corporation. Establish corporate policies.

A business that incorporates must file a document with the state, which includes a description of the business activities, the shares to be issued, and the composition of the board of directors. Which of the following terms are used to describe this document?

Corporate charter Articles of incorporation

Which of the following is included in the rights of common stockholders?

Right to vote

The number of shares authorized is set forth in the company's:

articles of incorporation

The total number of shares that a company may sell is referred to as ___________ shares.

authorized

The number of shares outstanding equals the number of shares ______.

issued minus the number of shares in treasury

In a corporation, the stockholders' potential loss is

limited to the amount of the investment.

Disadvantages of the corporate form of business are

more paperwork additional taxation.

A corporate charter:

names the board of directors. describes the business activities. specifies the shares of stock to be issued.

True or false: The board of directors is responsible for establishing corporate policies.

true

The rights of common stockholders typically include which of the following?

Right to distribution of assets in liquidation. Right to vote for corporate directors. Right to dividends when declared.