ACC 201 ch 10
Card Set Information
ACC 201 ch 10
Accumulated deficit p. 472
A debit balance in Retained Earnings.
Additional paid-in capital p. 458
The portion of the cash proceeds above par value.
Angel investors . p. 460
Wealthy individuals in the business community willing to risk investment funds on a promising business venture
Articles of incorporation p. 459
Describes the nature of the firm's business activities, the shares to be issued, and the composition of the initial board of directors.
Authorized stock . p. 464
The total number of shares available to sell, stated in the company's articles of incorporation
Convertible p. 467
Shares can be exchanged for common stock.
Cumulative p. 467
Shares receive priority for future dividends, if dividends are not paid in a given year.
Declaration date . p. 473
The day on which the board of directors declares the cash dividend to be paid
Dividends p. 472
Distributions by a corporation to its stockholders.
Dividends in arrears p. 467
Unpaid dividends on cumulative preferred stock.
Double taxation p. 462
A corporation pays income taxes on its earnings, and when dividends aredistributed to stockholders, the stockholders pay taxes a second time on the corporate dividends they receive.
Earnings per share p. 485
Measures the net income earned per share of common stock.
Growth stocks p. 486
Stocks that tend to have higher price-earnings ratios and are expected to have higher future earnings.
Initial public offering p. 460
The first time a corporation issues stock to the public.
Issued stock p. 464
The number of shares sold to investors; includes treasury shares.
Limited liability p. 462
Stockholders in a corporation can lose no more than the amount they invested in the company.
Model Business Corporation Act . p. 459
Serves as a guide to states in the development of their corporate statutes
Mutual agency p. 462
Individual partners each have power to bind the partnership to a contract.
No-par value stock p. 465
Common stock that has not been assigned a par value.
Organization chart p. 459
Traces the line of authority for a typical corporation.
Outstanding stock p. 464
The number of shares held by investors; excludes treasury shares.
Paid-in capital p. 458
The amount stockholders have invested in the company.
Par value p. 465
The legal capital assigned per share of stock.
Payment date p. 473
The date of the actual cash distribution of dividends.
Preferred stock p. 466
Stock with preference over common stock in the payment of dividends and the distribution of assets.
Price-earnings ratio p. 486
The stock price divided by earnings per share so that both stock price and earnings are expressed on a per share basis.
Privately held corporation p. 461
Does not allow investment by the general public and normally has fewer stockholders.
Publicly held corporation p. 460
Allows investment by the general public and is regulated by the Securities and Exchange Commission.
Record date p. 473
A specific date on which the company will determine the registered owners of stock and, therefore, who will receive the dividend.
Redeemable p. 467
Shares can be returned to the corporation at a fixed price.
Retained earnings pp. 458, 472
Represents all net income, less all dividends, since the company began.
Return on equity p. 483
Net income divided by average stockholders' equity; measures the income generated per dollar of equity.
Return on the market value of equity p. 484
Net income divided by the market value of equity.
S corporation. p. 463
Allows a company to enjoy limited liability as a corporation, but tax treatment as a partnership
Stated value p. 465
The legal capital assigned per share to no-par stock.
Statement of stockholders' equity . p. 480
Summarizes the changes in the balance in each stockholders' equity account over a period of time
Stock dividends p. 476
Additional shares of a company's own stock given to stockholders.
Stock split p. 476
A large stock dividend that includes a reduction in the par or stated value per share.
Treasury stock p. 458
A corporation's own stock that it has reacquired.
Value stocks p. 486
Stocks that tend to have lower price-earnings ratios and are priced low in relation to current earnings.
Venture capital firms p. 460
Provide additional financing, often in the millions, for a percentage ownership in the company.