CHAP 11

Darby, Inc. has 25,000 shares of stock issued and outstanding. All the shares of stock have the same rights and characteristics; therefore, the stock is calle_________stock.

Common

A __________ held corporation does not offer its stock for public sale and usually has few stockholders

Privately

A __________ held corporation offers its stock for public sale and can have thousands of stockholders.

Publicly

Which of the following is not a reason that a corporation would issue preferred stock?

To obtain a tax advantage over corporations with no preferred stock

Corporations purchase and hold their own stock, known as treasury stock, for several reasons. Identify which of the following is not a reason that a corporation would buy treasury stock.

To reduce the market value of the common shares outstanding

________stock is the number of shares that a corporation's charter allows it to sell. The number of these shares usually exceeds the number of shares issued (and outstanding), often by a large amount.

authorized

A _________ is the distribution of cash to its owners. This is determined by the board of directors.

cash dividends

Stock that typically includes preference for receiving dividends and for distribution of corporate assets during a liquidation is called

preferred stock

When a corporation purchases shares of its own stock, it is called ________ stock.

treasury

A small stock dividend is a distribution of _____% or less of previously outstanding shares.

25

The _____ lists the beginning and ending balances of key equity accounts and describes the changes that occur during the period.

Statemnt of stockholders equaity

When all authorized shares of stock have the same rights and characteristics, the stock is called _______ stock.

commmon

A ___________ is an entity created by law that is separate from its owners. Owners are called stockholders or shareholders. These entities can be privately or publicly held.

corporation

The board of directors authorizes a cash_____or distribution of cash to its investors.

dividend

Two of the biggest disadvantages of the corporate form of business are government regulation and corporate_________

double taxation

A charter application usually must be signed by the prospective stockholders called incorporaters or_____________ Then, it is filed with the appropriate state official.

promoters

The account that consists of a company's cumulative net income less any losses and dividends declared since its inception is called _________.

retained earnings

The board of directors of Visor, Inc. authorize a _________, a distribution of additional shares of the corporation's own stock, to existing shareholders.

stock dividend

A corporation is created by obtaining a charter from:

the state government