Podcast
Podcast
Download our mobile app to listen on the go
Get App
Podcast
Something went wrong
Something went wrong generating the podcast. Please try again.
Questions and Answers
Questions and Answers
What is Additional Paid-in Capital?
What is Additional Paid-in Capital?
- The total amount paid in on capital stock
- Cash distributions to stockholders
- Excess over par value paid in by stockholders (correct)
- The ownership interest in a corporation
What are cash dividends?
What are cash dividends?
Pro rata distributions of cash to stockholders.
What is common stock?
What is common stock?
The basic ownership interest in a corporation.
What is contributed (paid-in) capital?
What is contributed (paid-in) capital?
Signup and view all the answers
What is the cost method?
What is the cost method?
Signup and view all the answers
What are dividends in arrears?
What are dividends in arrears?
Signup and view all the answers
What is a leveraged buyout (LBO)?
What is a leveraged buyout (LBO)?
Signup and view all the answers
What are liquidating dividends?
What are liquidating dividends?
Signup and view all the answers
What is no-par stock?
What is no-par stock?
Signup and view all the answers
What is Paid-in Capital in Excess of Par?
What is Paid-in Capital in Excess of Par?
Signup and view all the answers
What is the par (stated) value method?
What is the par (stated) value method?
Signup and view all the answers
What is residual interest?
What is residual interest?
Signup and view all the answers
What are retained earnings?
What are retained earnings?
Signup and view all the answers
What is the statement of stockholders' equity?
What is the statement of stockholders' equity?
Signup and view all the answers
What is a stock split?
What is a stock split?
Signup and view all the answers
What is treasury stock?
What is treasury stock?
Signup and view all the answers
What is stockholders' (owners') equity?
What is stockholders' (owners') equity?
Signup and view all the answers
What is convertible preferred stock?
What is convertible preferred stock?
Signup and view all the answers
What are property dividends?
What are property dividends?
Signup and view all the answers
What is preferred stock?
What is preferred stock?
Signup and view all the answers
Questions and Answers
Something went wrong
Something went wrong generating the questions. Please try again.
Flashcards
Flashcards are hidden until you start studying
Flashcards
Something went wrong
Something went wrong generating the flashcards. Please try again.
Study Notes
Study Notes
Capital Concepts
- Additional Paid-in Capital: Refers to the excess amount paid over the par value of shares by stockholders, integrated into the corporation's paid-in capital.
- Contributed (Paid-in) Capital: Total funds raised from stockholders for capital stock, combining par value and additional paid-in capital.
- Common Stock: Represents basic ownership in a corporation, providing voting rights and bearing the risk of loss or gain through dividends or stock sales.
Dividend Types
- Cash Dividends: Distributions of cash to stockholders, declared by the board, recognized as a liability until payment is made.
- Dividend in Arrears: Unpaid dividends on cumulative preferred stock that must be settled before common stock dividends can be issued.
- Liquidating Dividends: Paid from sources other than retained earnings, indicating a return of investment rather than profits.
Stock Transactions and Management
- Treasury Stock: Shares the company reacquires, recorded as a deduction from total capital. Managed typically via cost or par-value accounting methods.
- Leveraged Buyout (LBO): Investment strategy involving borrowing funds to buy back a company's stock, eliminating public ownership.
- Stock Split: Process of increasing the number of shares outstanding by splitting existing shares, aimed at reducing market prices for improved investor access.
Preferred and No-Par Stock
- Preferred Stock: Offers specific advantages like priority on dividends and assets in liquidation, differentiated by features like convertibility and callable options.
- No-Par Stock: Shares without assigned par value, eliminating potential liabilities from issuing stock below par.
Financial Statements
- Statement of Stockholders' Equity: Details changes in stockholders' equity accounts over a reporting period, showing beginning and ending balances.
- Retained Earnings: Accumulated profits not distributed as dividends, reflecting the company's earned capital.
Ownership Interests
- Residual Interest: The stake of stockholders represented by the difference between a company’s total assets and its liabilities, highlighting their claim on remaining assets.
- Stockholders' (Owners') Equity: Represents total ownership claims, consisting of contributions and retained earnings, documented on the balance sheet.
Accounting Methods
- Cost Method: Approach for treasury stock where shares are recorded at reacquisition costs, reflected as a deduction on the balance sheet.
- Par (Stated) Value Method: Alternative accounting for treasury shares, recording transactions at par value and affecting only capital stock reporting.
Particular Stock Characteristics
- Convertible Preferred Stock: Allows conversion into common stock, enabling participation in equity growth while enjoying preferential dividends.
- Property Dividends: Non-cash distributions treated at fair value, with the company recognizing gains or losses relative to carrying value.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Study Notes
Something went wrong
Something went wrong generating the study notes. Please try again.
