Chapter 11 Corporations and Their Financial Statements KT

Question 1

A financial statement which shows a company’s revenues and expenditures resulting in either a profit or a loss during a financial period.

Answer 1

statement of comprehensive income

Question 2

A financial statement showing a company’s assets, liabilities and equity on a given date.

Answer 2

statement of financial position

Question 3

Cash and assets which in the normal course of business would be converted into cash, usually within a year, e.g., accounts receivable, inventories.

Answer 3

current asset

Question 4

A company whose shares are listed on a stock exchange or traded over the counter.

Answer 4

public corporation

Question 5

The act of a public corporation complying with continuous disclosure requirements set out by the relevant provincial securities act.

Answer 5

continuous public disclosure

Question 6

Money owed and due to be paid within a year, e.g., trade payables.

Answer 6

current liabilities

Question 7

A current liability on the statement of financial position that reflects the money owed by a company for goods or services purchased, payable within one year.

Answer 7

trade payables

Question 8

A current asset on the statement of financial position that reflects the money owed to a company for goods or services it has sold, for which payment is expected within one year.

Answer 8

trade receivables

Question 9

An arrangement whereby shareholders surrender voting rights to a trustee, thereby placing control of a company in the hands of certain managers for a given period of time, or until certain results have been achieved.

Answer 9

voting trust

Question 10

A form of business organization that involves two or more people contributing to the business and legislated under the federal Partnership Act.

Answer 10

partnership

Question 11

An intangible asset on the statement of financial position that is understood to represent the value of a well-respected business.

Answer 11

goodwill

Question 12

Trading in a security by someone who has access to non-public material information.

Answer 12

insider trading

Question 13

Companies that have charters that restrict transferability of shares, number of shareholders, and prohibit shareholders from inviting the public to subscribe for their securities.

Answer 13

private corporation

Question 14

A non-cash bookkeeping entry that records systematic charges against earnings to write off the cost of an asset over its estimated useful life.

Answer 14

depreciation

Question 15

A change in the affairs of a company that is expected to have a significant effect on the market value of its securities.

Answer 15

material change

Question 16

Written authorization given by a shareholder to someone else, who need not be a shareholder, to represent him or her and vote his or her shares at a shareholders’ meeting.

Answer 16

proxy

Question 17

A form of business organization that involves one person running a business whereby the individual is taxed on earnings at their personal income tax rate.

Answer 17

sole proprietorship

Question 18

The cumulative total of annual earnings held onto by a company after payment of all expenses and dividends.

Answer 18

retained earnings