Chapter 4 - Corporate Accounting

Question 1

what is paid in capital?

Answer 1

Paid In Capital - amounts of capital paid into the corporation over it’s life (Common Stock, Preferred Stock, Additional Paid In Capital)

Question 2

what is earned capital?

Answer 2

Earned Capital - amounts the corporation earned through profits over it’s life (Retained Earnings)

Question 3

what is the first step of process of forming a corporation?

Answer 3

Apply within the state

Question 4

what is Organization Costs and how should be amortized?

Answer 4

should not be written off over a period of greater than 40 years but no less than 5 years

Question 5

what is common stock?

Answer 5

Common Stock

Question 6

what is par value?

Answer 6

Share of stocks must have a par value. Company set up Par value very low. Nothing to do with the market value

Question 7

what is Date of declaration?

Answer 7

The date that Board of directors announces a future dividend

Question 8

what is Date of Record?

Answer 8

The date that list of the holders of the shares of stock is complied so the dividend checks can be mailed to them

Question 9

what is Ex-dividend date?

Answer 9

After this date, even though the dividend will be paid soon, the purchaser will not receive the payment

Question 10

what is Date of payment?

Answer 10

The date that actual dividend is paid