Chapter 15-Stockholder's Equity Flashcards Preview

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Flashcards in Chapter 15-Stockholder's Equity Deck (36)
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1

Additional paid-in capital

The excess over par value paid in by stockholders in return for the shares issued to them.

2

Callable preferred stock

Preferred stock that grants the issuer the right to purchase the stock from stockholders at specified future dates and prices.

3

Cash dividend

When a corporation distributes a dividend in cash to the stockholders.

4

Common stock

The residual corporate interest that bears the ultimate risks of loss and receives the benefits of success.

5

Contributed capital

Capital stock and additional paid-in capital (also called paid-in capital).

6

Convertible preferred stock

Preferred stock that provides for the exchange of preferred stock into common stock at a specified ratio.

7

Cost method

The Treasury Stock account is debited for the cost of the shares acquired and is credited upon reissuance for this same cost.

8

Cumulative feature

A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive dividends.

9

Date of declaration

The date the board of directors meets and approves the declaration of a dividend.

10

Date of payment

The date the board of directors has approved to pay a dividend.

11

Date of record

The date on which owners of the stock are entitled to a declared dividend.

12

Discount on stock

The amount under par value paid in by stockholders in return for the shares issued to them.

13

Dividend

When a corporation distributes assets (or issues additional stock) to the stockholders.

14

Earned capital

Capital that develops if the business operates profitably; it consists of all undistributed income that remains invested in the enterprise.

15

Equity capital

The contributed capital and earned capital of a corporation.

16

Large stock dividend

A stock dividend of more than 20-25% of the number of shares previously outstanding.

17

Liquidating dividend

A dividend not based on retained earnings; implying that stockholders are receiving a return of their investment, rather than profits.

18

No-par stock

Shares issued with no per-share amount printed on the stock certificate.

19

Paid-in capital

Capital stock and additional paid-in capital (also called
contributed capital).

20

Par value stock

Capital stock that has been assigned a value per share in the corporate charter; it establishes the maximum responsibility of a stockholder in the event of insolvency or other involuntary dissolution.

21

Participating dividends

A feature of preferred stock enabling the stockholder to share ratably with common stockholders in any dividends beyond the rate specified on the preferred stock.

22

Preemptive right

A stockholder’s right to share proportionately in any new issues of stock of the same class.

23

Preferred stock

Capital stock that has contractual preferences over common stock in certain areas.

24

Property dividend

When a corporation distributes a dividend of an asset other than cash to the stockholders.

25

Redeemable preferred stock

Preferred stock that has a mandatory redemption period or a redemption feature that the issuer cannot control.

26

Retained earnings

Earnings retained for use in the business.

27

Small (ordinary) stock dividend

Stock dividends of less than 20-25%.

28

Stated value

The amount per share assigned by the board of directors to nopar stock that becomes legal capital per share.

29

Statement of stockholders' equity

The disclosure of changes in the separate accounts comprising stockholders’ equity.

30

Stock dividend

The corporation issues additional stock to its stockholders rather than distributing any assets.