Term
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Definition
| A Corporation that has characteristics of both regular corporations and partnerships. These corporations have the limited liability protection of a corporaation, but income and expenses are passed through to the owners as in a partnership, thus avoiding double taxation. |
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Term
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Definition
| The amount of cash received in excess of the stated par value of the stock. |
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Term
| How is a restriction of retained earnings indicated in the financial statements? |
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Definition
| By using a disclosure note. |
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Term
| What is a property dividend? |
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Definition
| Any noncash asset that is distributed to the shareholders as a dividend. |
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Term
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Definition
| A large stock dividend of 25% or higher |
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Term
| What are the two primary sources of shareholder's equity? |
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Definition
1.Paid-in capital, which is the amount invested by the shareholders in the corporation, and
2. Retained earnings, which is the amount earned by the corporation on behalf of its shareholders. |
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Term
| What is a preemptive right? |
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Definition
| A right given to common shareholders which allows them to maintain their percentage of ownership when new shares are issued. |
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Term
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Definition
| Reacquired shares (by the corporation) that assume the status as authorized but unissued shares, just as if they had never been issued. |
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Term
| How are share issue costs accounted for? |
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Definition
| By reducing the amount credited to the paid-in capital account. |
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