Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Accounting 100 > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

corporation

A

an entity separate and distinct from its owners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

entities are classified by purpose:

A

profit or not for profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

entities are classified by ownership

A

publicly held or privately held

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

advantages of entities

A 
separate legal existence
limited liability of stockholders
transferable ownership rights
ability to acquire capital
continuous life
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

disadvantages of entities

A

corporate management
government regulations
additional taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

stockholders’ rights

A

1) vote
2) share corp earning thru receipt of dividends
3) keep the same % of ownership when new shares of stock are issued
4) share in assets upon liquidation in proportion to holdings (residual claim)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

authorized stock

A

charter indicates the amount of stock that a corp is authorized to sell
(# is often reported in S.H.E. section)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

par value stock

A

capital stock that has been assigned a value per share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

no-par value stock

A

capital stock that has not been assigned a value per share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

which type of capital stock is more common today?

A

no par value stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

2 primary sources of equity

A

1) paid in capital

2) retained earnings

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

paid in capital

A

the total amount of cash/other assets paid in to the corp by stockholders in exchange for capital stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

retained earnings

A

net income that a corp retains for future use

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

journal entry: issuing stock at par value

A

dr. cash

cr. common stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

journal entry: issuing stock - excess of par

A

dr cash (for the amt issued @)

cr. common stock (for the par value amt)
cr. paid-in capital in excess of par (dif)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

treasury stock

A

corp’s own stock that it has reacquired from shareholders but not retired

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

why purchase outstanding stock?

A

1) to reissue shares to officers and employees under bonus and stock compensation plans
2) to increase trading of the co’s stock in the securities market
3) to have additional shares available for use in acquiring other co.s
4) to increase earnings per share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

purchase of treasury stock is generally accounted for by the _____ method

A

cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

journal entry: treasury stock

A

dr treasury stock

cr. cash

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

treasury stock is a ____-_____ _____ acct, not an _____. Purchase of treasury stock ______ stockholders’ equity

A

contra-stockholders’ equity; asset; reduces

21
Q

preferred stock

A

preference as to dividends
preference as to assets in liquidation
non voting

22
Q

preference as to dividends

A

1) receive before common stockholders
2) per share dividend amt: % of the pref. stock’s par value
3) cumulative dividend: must be paid dividends and dividends in arrears before common stockholders

23
Q

journal entry: preferred stock excess par

A

dr. cash (total amt)
cr. preferred stock (par value amt)
cr. paid-in capital excess of par-pref. stock (dif)

24
Q

preference as to assets in liquidation

A

1) preference on corp assets if corp fails

2) preference may be for par value of shares or specified liquidating value

25
Q

dividends in arrears

A

preferred dividends that were supposed to be declared but were not declared during a given period

26
Q

types of dividends

A

1) cash dividends
2) stock dividends
3) stock splits

27
Q

for a corp to pay a cash dividend it must have:

A

1) RE-payment from RE is legal
2) adequate cash
3) declaration by the board of directors

28
Q

3 dates important to dividends

A

1) declaration date
2) record date
3) payment date

29
Q

journal entry: declaration date (cash dividends)

A

dr. cash dividends

cr. dividends payable

30
Q

journal entry: record date (cash dividends)

A

no entry-registered shareholders are eligible for the dividend

31
Q

journal entry: payment date (cash dividends)

A

dr. dividends payable

cr. cash

32
Q

stock dividends

A

pro rata distribution of a cos own stock

33
Q

why issue stock dividends?

A

1) satisfy stockholder’s dividend expectations w/o spending cash
2) increase market ability of the corp’s stock
3) emphasize that a portion of S.H.E. has been permanently reinvested in the business

34
Q

effects of issuing stock dividends

A

1) changes composition of SHE but total SHE remains the same
2) no effect on par or stated value per share
3) increases # of shares outstanding

35
Q

journal entry: stock dividend paid in excess (declaration date)

A

dr. stock dividends ( % declared x # shares x fair market value)
cr. common stock dividends distributable (% declared x # shares x par value)
cr. paid-in capital excess par (dif)

36
Q

journal entry when stock dividend shares are issued

A

dr. common stock dividends distributable

cr. common stock

37
Q

stock splits

A

reduces the mkt value of shares

38
Q

journal entry: stock split

A

no entry

39
Q

stock splits ___ par value and ____ # of shares

A

decrease; increase

40
Q

stock splits _____ par value per share but _______ balances in SHE

A

changes; does not affect

41
Q

total paid in capital changes

A 
stock dividend (+)
stock split (no change)
42
Q

total RE change

A 
stock dividend (-)
stock split (no change)
43
Q

total par value (common stock) change

A 
stock dividend (+)
stock split (no change)
44
Q

par value per share change

A 
stock dividend (no change)
stock split (-)
45
Q

shares outstanding change

A 
stock dividend (+)
stock split (+)
46
Q

total SHE change

A 
stock dividend (no change)
stock split (no change)
47
Q

payout ration

A

cash dividends distributed on CS/net income

48
Q

return on CSHE ratio

A

(net income- preferred stock dividends)/average common SHE

Accounting 100 (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions