a list of accounting terms with which you should be familiar appears below 610402

This exercise will quiz you about terminology used in this chapter.

A list of accounting terms with which you should be familiar appears below:

This material is covered in Appendix 11B in the text.

Instructions

For each item below, enter in the blank the term that is described.

1. ____________________________________A corporation that may have thousands of stockholders and whose stock is regularly traded on a national securities market.
2. ____________________________________A corporation that has only a few stockholders and whose stock is not available for sale to the general public.
3. ___________________________________The amount of stock that a corporation is authorized to sell as indicated in its charter.
4. ___________________________________Costs incurred in the formation of a corporation.
5. ___________________________________Capital stock that has been issued and is being held by stockholders.
6. ___________________________________The amount per share of stock that must be retained in the business for the protection of corporate creditors.
7. ___________________________________Total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
8. ___________________________________Net income that is retained in the business.
9. ___________________________________Capital stock that has been assigned a value per share in the corporate charter.
10. ___________________________________The amount per share assigned by the board of directors to no-par stock that becomes legal capital per share.
11. ___________________________________Capital stock that has not been assigned a value in the corporate charter.
12. ___________________________________Capital stock that has contractual preferences over common stock in certain areas.
13. ___________________________________The equity a common stockholder has in the net assets of the corporation from owning one share of stock.
14. ___________________________________A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive any dividends.
15. ___________________________________A corporation”s own stock that has been issued, fully paid for, and reacquired by the corporation but not retired.
16. ___________________________________A corporation”s distribution of cash or stock to its stockholders on a pro rata (equal) basis.
17. ___________________________________A pro rata distribution of cash to stockholders.
18. ___________________________________A pro rata distribution of the corporation”s own stock to stockholders.
19. ___________________________________The issuance of additional shares of stock to stockholders (according to their percentage ownership) accompanied by a reduction in the par or stated value per share.
20. ___________________________________The date the board of directors formally declares the dividend and announces it to stockholders.
21. ___________________________________The date when ownership of outstanding shares is determined for dividend purposes.
22. ___________________________________The date dividend checks are mailed to stockholders.
23. ___________________________________A dividend declared out of paid-in capital.
24. ___________________________________A financial statement that shows the changes in retained earnings during the year.
25. ___________________________________Circumstances that make a portion of retained earnings currently unavailable to serve as the basis for dividend declaration.
26. ___________________________________The correction of an error in previously issued financial statements.
27. ___________________________________A debit balance in retained earnings.
28. ___________________________________A statement that shows the changes in each stockholders” equity account and in total stockholders” equity during the year.
29. ___________________________________A document that creates a corporation.
30. ___________________________________A business organized as a legal entity separate and distinct from its owners under state corporation law.
31. ___________________________________The owners” equity in a corporation. Also called stockholders” equity or shareholders” equity.
32. ___________________________________ A ratio that measures profitability from the stockholders” point of view. It is computed by dividing net income by average common stockholders” equity.