Shares Flashcards
Market value =
Share price
Par (nominal value) =
Value of share when the company was incorporated
Authorised capital =
Maximum of share capital a company can issue
Issued capital =
Par amount of share capital issued to shareholders
Called up capital =
When shared are issued/ allotted, a company doesn’t expect the full amount to be paid, they wait for a later date before the remainder is called up
Paid up capital =
When capital is called up, some shareholders might delay or default on their payment
Retained earnings =
Profits earned by a company and not appropriated by dividends, taxation or transfer to another reserve account
Equity shares double entry
DR Bank
CR Share Capital
CR Share Premium
Redeemable preference shares double entry
DR Cash
CR Redeemable preference shares
Bonus issue =
Shares offered to existing shareholders (always offered at par (nominal) value
Bonus issue double entry
DR Share premium
CR Share capital
Rights issue =
Usually discounted shares offered to existing shareholders
Rights issue double entry
DR Bank
CR Share Capital
CR Share Premium