Chapter 13: Corportations Flashcards
Organization, Stock Transactions, and Dividends.
Corporation
A legal entity, distinct and separate from the individuals who create and operate it.
Stock
Shares of ownership of a corporation.
Stockholders
The owners of a corporation
Limited Liability
This means that creditors usually may not go beyond the assets of the corporation to satisfy their claims
articles of incorporation
The articles of incorporation formally create the corporation
application of incorporation
First step in forming a corporatoins
stockholders’ equity,
The Owner’s equity in a corporatoin
Paid-In-Capital
Capital contributed to a corporation by the stockholders and others.
Retained Earnings
Net income retained in a corporation.
Dividends
Distribution of a corporation’s earnings to stockholders.
Deficit
A debit balance in the retained earnings account.
Authorized Stock
Number of Shares of stock a corporation is allowed to issue to its stock holders, as stated in its articles of incorporation.
Outstanding stock
The stock in the hands of stockholders.
Par Value
A dollar amount assigned to each share of stock.
Common Stock
The stock outstanding when a corporation has issued only one class of stock.
Preferred Stock
A class of stock with preferential rights over common stock.
Cumulative Preferred Stock
Stock that has a right to receive regular dividends that were not declared
In Arrears
Cumulative preferred stock dividends that have not been paid in prior years are said to be in arrears.
Premium
The excess of the issue price of a stock over its par value or the excess of the issue price of bonds over their face amount.
Discount
The interest deducted from the maturity value of a note or the excess of the face amount of bonds over their issue price.
Cash Dividends
A cash distribution of earnings by a corporation to its shareholders.
Date of Decleration
the date the board of directors formally authorizes the payment of the dividend.
Date of Record
the date the corporation uses to determine which stockholders will receive the dividend.
Date of Payment
the date the corporation will pay the dividend to the stockholders who owned the stock on the date of record.
Stock Dividend
A distribution of shares of stock to its stockholders.
Stock Split
A reduction in the par or stated value of a common stock and the issuance of a proportionate number of additional shares.
Treasury Stock
Stock that a corporation has once issued and then reacquires.
Retained Earnings Statement
A summary of the changes in the retained earnings in a corporation for a specific period of time, such as a month or a year.
Restrictions
Amounts of retained earnings that have been limited for use as dividends.
Prior Period Adjustment
Corrections of material errors related to a prior period or periods, excluded from the determination of net income.
Statement of Stockholder’s Equity
A summary of the changes in the stockholders’ equity in a corporation that have occurred during a specific period of time.
Earnings Per Share
Net income per share of common stock outstanding during a period.
