SHAREHOLDER'S EQUITY

Question 1

What are the three forms of business organization?

Answer 1

Sole proprietorship, Partnership, Corporation

Question 2

Sole proprietorship’s claims against the assets is

Answer 2

owner’s equity

Question 3

Partnership’s claims against the assets is

Answer 3

partner’s equity

Question 4

Corporation’s claims against the assets is

Answer 4

shareholder’s equity

Question 5

4 components of corporation

Answer 5

1. Corporators
2. Incorporators
3. Shareholders
4. Members

Question 6

Contains the minutes of the meetings of the directors and shareholders

Answer 6

Minutes book

Question 7

Record of the names of the stockholders, installments paid and unpaid by shareholders and dates of payment, any transfer of shares and dates thereof

Answer 7

Stock and transfer books

Question 8

The record of all business transactions

Answer 8

Books of accounts

Question 9

Book of printed blank subscription

Answer 9

Subscription book

Question 10

A subsidiary for the share capital issued reporting the number of shares issued to each shareholder

Answer 10

Shareholder’s ledger

Question 11

A subsidiary for the subscriptions receivable account

Answer 11

Subscriber’s ledger

Question 12

Book of printed blank share certificates

Answer 12

Share certificate book

Question 13

The residual interest of owners in the net assets of a corp measured by the excess of assets over liabilities

Answer 13

Stockholder’s equity

Question 14

What are the elements of stockholder’s equity? (9)

Answer 14

1. Share capital
2. Share premium
3. Subscribed share capital
4. Ordinary share capital
5. Preference share capital
6. Retained earnings (deficit)
7. Retained earnings appropriated
8. Revaluation surplus
9. Treasury share

Question 15

Portion of the paid in capital representing the total par or stated value of the shares issued

Answer 15

Share capital

Question 16

Portion of the authorized share capital that has been subscribed but not yet fully paid and therefore still unissued

Answer 16

Subscribed share capital

Question 17

Portion of the paid in capital representing excess over the par or stated value

Answer 17

Share premium

Question 18

Cumulative balance of periodic earnings, dividend distributions, prior period errors and other capital adjustments

Answer 18

Retained earnings

Question 19

Excess of revaluated amount over the carrying amount of the revalued asset

Answer 19

Revaluation surplus

Question 20

Corporation’s own shares that have been issued and then reacquired but not canceled

Answer 20

Treasury shares

Question 21

What is the meaning of capital stock/ share capital?

Answer 21

Amount fixed in the articles of incorporation to be subscribed and paid in by the shareholders

Question 22

Authorized share capital

Answer 22

Amount fixed in the articles of incorporation

Question 23

Share represents

Answer 23

the interest or right of shareholders in the corporation

Question 24

The instrument or document that evidences the ownership of the shares

Answer 24

Share certificate

Question 25

Two classes of share capital

Answer 25

par value or no-par value share

Question 26

The one with specific value fixed in the articles of incorporation and appearing on the face of the share cert

Answer 26

Par value share

Question 27

The one without any value appearing on the face of the share cert

Answer 27

No par value share

Question 28

Gives the owner the right to vote, share in the income, and in the event of liquidation, to share in all assets

Answer 28

Ordinary shareholders

Question 29

They have limited or fixed return on investment

Answer 29

Preference shareholders

Question 30

That portion of the paid in capital arising from issuance of share capital which cannot be returned to the shareholders in any form during the lifetime of the corporation

Answer 30

Legal capital

Question 31

Two methods for the accounting of share capital

Answer 31

Memorandum and Journal entry method