ACCT 110- CH 8 Flashcards
single-owner responsible for making business and profit distribution decisions
( not legal entity) ( no continuous life) (UNLIMITED LIABILITY)
Sole Proprietorship
two or more, shared range of talents, rewards of ownership.
( no continuous life) ( All partners responsible for each other)
Partnerships
Separate legal entity created by authority of state government. All states require application to provide articles of incorporation.
(continuous life through buy and sell of stocks) ( heavily government regulated) (DOUBLE TAXATION)
Corporation
Gives Corporate veil without tax rate.
Assets protected but corporation could be held liable.
Limited Liability Corporation
Represents maximum liability of the investors
Par Value
arbitrary amount assigned by the board of directors to the stock
Stated Value
Can buy and sell stock, share distribution of profits, value on matters that affect corporate charter
Common Stockholder
cumulative dividends, preference to assets in case of bankruptcy, preference as to dividends before other type of stockholder
Preferred Stockholder
Buying back stock to avoid hostile takeover, in case of mergers, keeps the price of stock higher
Treasury Stock
Cash dividends are affected by 3 significant dates that are what?
Declaration Date (liability obtained)
Date Recorded (cut off date)
Payment Date (payoff date) cash decreases and dividend liability increases
Restricts amount of retained earnings available to distribute dividends
Appropriated Retained Earnings
Entry for buying treasury stock
cash decreases and treasury stock increases
Entry for reissuing treasury stock
cash increase, treasury stock decreases, paid In capital from treasury stock increases
reducing market price of stock
1. Retained Earnings not affected
2.replace existing shares with a greater number of new shares
3.reduce market price per share of its outstanding stock
Stock Splits
