1 stockholders equity chapter 12
par value
the legal capital established for a share of stock
all of the following are stockholders equity accounts except: treasury stock preferred stock retained earnings dividends payable
dividends payable
disadvantage of corporate form of business
double taxation government regulation
retained earnings consist of a pool of funds to be distributed to stockholders
false
the board of directors carries out the day-to-day operations of the corporation
false
the declaration of a cash dividend causes an increase in a corporation's liabilities at the date of record
false
advantage of corporate form of business
separate legal entity continuous existence easy transfer of ownership ease of capital generation professional management
no entry is required on the date of record for a cash dividend
true
stock options are often granted by a corporation to management personnel as a means of additional compensation to and motivation of employees
true
stockholders elect the board of directors which appoints the officers of a corporation
true
the cost of treasury stock is deducted from total contributed capital and retained earnings in determining total stockholders equity
true
the liability of a stockholder is usually limited to the stockholder's investment in the corporation
true
the price/earnings ratio is a measure of investors' confidence in a company's future
true
the stockholders equity in a corporation consists of capital contributed by stockholders and retained earnings
true