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