Test 2 Flashcards
what is does it mean that a corporation is double-taxed
it is taxed for its income and the owners (stockholders) are taxed on dividends
who establishes accounting standards in the United States
FASB
What are preemptive stockholder rights
the right of existing stockholders to know and purchase new shares before they are offered to the public
three types of audit opinions
Adverse, qualified, and unqualified
what are the rights of a stockholder’s rights
- earn corporate earnings through dividends
- right to assets in case of liquidation
- right to purchase stock before they are offered to public
- voting rights at stockholder meetings
three sections of an audit report
scope, definition, and opinion
what is the primary purpose of a financial accounting
to look at the financial health of a company
what do partners receive in a partnership
salaries and the right to withdraw limited funds
what are the characteristics of a S-corporation
not double taxed, limited liability, only one class of stock, and limited to 100 stockholders
what are the two purposes of a stock dividend
to keep the market price affordable, and to show confidence in the company management
what are the two purposes of internal controls
to safeguard against fraud and minimize risk in the system
what is vertical and horizontal anaylsis
vertical looks internally horizontal looks and compares with other companies
