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FAR > F7M1 > Flashcards

F7M1 Flashcards

1
Q

stockholder’s equity

A

owner’s claim to the net assets

residual claim on ‘net assets’

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2
Q

Legal capital

A

common stock and preferred stock

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3
Q

Earned capital

A

retained earnings

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4
Q

Contributed capital

A

CS
PS
RE
APIC

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5
Q

Capital stock

A

legal capital, retained by the corproation for the protection of creditors

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6
Q

Par value

A

common stock listed with par value, preferred stock is not

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7
Q

Authorized

A

stock that may be legally issued

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8
Q

common stock

A

basic ownership in a corporation; right to vote; last in line during bankruptsy

NOT guaranteed dividends

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9
Q

Common Shareholder’s equity

A

Total Shareholders equity (A-L)
MINUS: PS
MINUS: PS dividends

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10
Q

Shareholder’s equity calculation

A

asset - liabilities

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11
Q

Book value per common share

A

common shareholder’s equity / outstanding shares

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12
Q

Preferred stock

A

preferences related to dividends

no voting right

preference in liquidation

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13
Q

Cumulative preferred stock

A

dividends in arrears

dividends accumulate

not a legal liability

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14
Q

Noncumulative preferred stock

A

does NOT accumulate dividends

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15
Q

Participating preferred stock

A

share equally and then pro rata with common stock

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16
Q

Converitble preferred stock

A

at the option of the shareholder

17
Q

callable (redeemable) preferred stock

A

at the option of the corporation

18
Q

Mandatory preferred stock

A

liability not shareholder’s equity

19
Q

APIC

A

generally contributed cpaital in excess of par or stated value

could also include sale of TS, liquidiating dividends, conversion of bonds, or small stock dividends

20
Q

retained earnings

A

earned stockholder’s equity

accumulated earnings during the life of the corporation that has not been paid out in dividends

21
Q

Formula for RE

A

NI
- dividends DECLARED
+/- prior period adjustments
+/- accounting changes retro

22
Q

Appropriations of RE

A

revenue restricted for legal/contractual/contingent reasons

reversed after the appropriation has occured

23
Q

JE for appropriation of RE

A

DOES NOT CHANGE TOTAL RE

DR: RE (unappropriated)
CR: RE (appropriated)

24
Q

OCI

A

not entered into RE

25
Q

Treasury stock

A

reduces equity; corproation buying back their own stock

either cost or par method

26
Q

Gains and losses treasury stock

A

gain makes APIC go up

losses reduce APIC until it hits 0, then begins hitting RE

27
Q

Adjustments of treasury stock

A

direct adjustment to equity and NOT included in net income

28
Q

cost method

treasury stock

A

recorded at the buy back costs

29
Q

Par method

treasury stock

A

recorded at par value

g/l recognized immediately

30
Q

If the treasury stock was breing retired

A

replace cash with common stock

FAR (41 decks)

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