Stockholders' Equity

Question 1

The residual of assets minus liablities (net assets)

Answer 1

Stockholders’ equity

Question 2

The par or stated value of sstock

Answer 2

Legal capital

Question 3

Preferred stock in which the preferred shareholders share iwth commmon stockholders in dividend distributions after both the preferred and common stockholders receive a specified level of dividend payment

Answer 3

Participating Preferred stock

Question 4

Preferred stokc in which if dividneds are not paid they must be made up before distributions canbe made to common stockholders–however dividends in arrears are nto a liability until declared

Answer 4

Cumulative preferred stock

Question 5

Preferred stock in which the stockholders have an option of exchanging their stock for common stock at a specified ratio

Answer 5

convertible preferred stock

Question 6

Preferred stokc in which the corporation has the option to repurchase hte preferred stock at a specified price, with gains being charged to Paid-in capital, and losses flowing through retained earninga

Answer 6

Callable preferred stock

Question 7

Agreement to purchase a given number of shares at a specified price at a later date

Answer 7

Stock subscriptions

Question 8

A firm’s own stock repurchased on the open market–not an aset; treated as a reduction in SE; Uses terms “ above cost” and “below cost” instead of G/L b/c firm can’t recognize g/l on trnasactions wiht itself

Answer 8

Treasury stock

Question 9

Method of accounting for treasury stock in which treasury is tock is debited for hte cost of the treasy stock

Answer 9

Cost method

Question 10

Method of accounting for treasury stock in which all capital balances associated with the trasury shares are removed upon acquisition

Answer 10

Par value method

Question 11

Dividends payable in an asset other than cash–recordedat fair value of the asset transferred, with any g/l recognized on hte difference between the asset’s book value and fv at disposition

Answer 11

Property dividends

Question 12

Dividends based on other than earnings that are a return of capital to stockholders

Answer 12

Liquidating dividends

Question 13

Dividends that are the ssuance of promises to pay dividends in the future instead of cash–liability that is not extinguished until payment

Answer 13

Script dividneds

Question 14

A large stock dividned that changes the number of shares outstanding and hte parvalue per share (reduced in proportion to the increase in the number of shares)

Answer 14

Stock splits

Question 15

Retianed earnings that are set aside that can specifically not be used for dividend payments

Answer 15

Appropriated retained earnings

Question 16

In stock option plans, the period in whichthe employeee is required to provide services, which is usually the vesting period

Answer 16

Requisite service period

Question 17

in stock option plans, the beginning of the requisite service period

Answer 17

Service inception date

Question 18

A form of stock based compensation that allows employees to receive stock or cash equal in amount to hte difference between teh market value and some predetermined amount per share for a certain number of shares

Answer 18

Stock appreciation rights (SAR)s

Question 19

Measure the performance of the entity over hte reporting period while also taking into account hte effect of all dilutive potential common shares htat were outstanding during the period

Answer 19

Diluted EPS

Question 20

The method used to determine the dilutive effects of options nand sarrants

Answer 20

Treasury stock method

Question 21

Assumption made when determining hte dilutive effect of preferred stock that all prefered stock is convertedat the earliest date that it could have occurred during the year

Answer 21

if-converted method—will get rid of amy preferred dividends if converted and increase common stock outstanding

Question 22

A document prepared to present the current market values of the assets and the status of the various categories of the equity interests of the corporation in bankruptcy situation–classifies assets in order of priority

Answer 22

Statement of Affairs

Question 23

Allows companiese to avoid formal bankruptcy proceedings through an informal proceeding–applicable for a suation where a going concern exists ecept for overvalued assets and a possible deficit

Answer 23

Quasi Reorganization

Question 24

A qualified stock bonus plan desinged to invest primarily in qualifying employer securities, including stock and other marketable ogliations

Answer 24

Employee Stock Ownership Plan (ESOP)

Question 25

An additional method for accounting for reaquired shares that is allowable under IFRS in which the par value of the required hsares is charged to the share account instead of treasury stock–used when managmenet does not intend to reissue the shares

Answer 25

Constructive retirement method