Chapter 13 Corporation Characteristics and Financial Statements

<p>It is the portion of the corporation's profits that has not been distributed to shareholders. (B)</p> Signup and view all the answers

<p>Statement of Cash Flows (B)</p> Signup and view all the answers

<p>To show the changes in the company's retained earnings balance over a period of time. (B)</p> Signup and view all the answers

<p>Net Income / Shareholders' Equity (C)</p> Signup and view all the answers

<p>To present the details of the company's ownership structure and investments. (C)</p> Signup and view all the answers

<p>Preferred shareholders have priority in receiving assets. (B)</p> Signup and view all the answers

<p>These shares are entitled to receive dividends for the current year as well as any past due dividends. (D)</p> Signup and view all the answers

<p>The date on which the dividend payment is legally committed by the company. (C)</p> Signup and view all the answers

<p>The approval of the stock exchange where the shares are traded. (E)</p> Signup and view all the answers

<p>To accurately account for the rights and privileges associated with each class of shares. (E)</p> Signup and view all the answers

<p>Dividends are distributed based on the number of shares owned by each shareholder. (D)</p> Signup and view all the answers

<p>Bonus Dividends (C)</p> Signup and view all the answers

<p>Preferred shareholders are entitled to receive dividends before common shareholders. (E)</p> Signup and view all the answers

<p>It represents the owners' investment in the company and its accumulated profits. (A)</p> Signup and view all the answers

<p>Common shares have voting rights, while preferred shares generally do not. (C)</p> Signup and view all the answers

<p>It represents the amount of profits that the company has earned and kept for future use. (C)</p> Signup and view all the answers

<p>It increases the amount of contributed capital. (A)</p> Signup and view all the answers

<p>Purchase of inventory. (A)</p> Signup and view all the answers

<p>Selling shares (D)</p> Signup and view all the answers

<p>It acts independently of its owners (D)</p> Signup and view all the answers

<p>Initial public offering (B)</p> Signup and view all the answers

<p>Dividend rights (A)</p> Signup and view all the answers

<p>Representing the interests of shareholders (C)</p> Signup and view all the answers

<p>The corporation's life is unaffected (D)</p> Signup and view all the answers

<p>The maximum number of shares the company can issue (B)</p> Signup and view all the answers

<p>Into different classes with varying rights (B)</p> Signup and view all the answers

<p>Legal capital refers to the retained earnings of a corporation. (D)</p> Signup and view all the answers

<p>Paying dividends (C)</p> Signup and view all the answers

<p>Debit Legal Fees Expense, Credit Common Shares (C)</p> Signup and view all the answers

<p>Retained Earnings (A)</p> Signup and view all the answers

<p>Supply and demand, as well as other external factors (D)</p> Signup and view all the answers

<p>Legal capital cannot be distributed to shareholders, while retained earnings can be distributed as dividends. (C)</p> Signup and view all the answers

<p>Provides information about the company's retained earnings. (C)</p> Signup and view all the answers

<p>Retained earnings are a claim on the total assets of the corporation, but not on any specific asset. (D)</p> Signup and view all the answers

<p>To determine which shareholders are eligible to receive the dividend payment. (B)</p> Signup and view all the answers

<p>Statement of Changes in Equity (B)</p> Signup and view all the answers

<p>Issuance of new common shares. (D)</p> Signup and view all the answers

<p>It is presented as a separate line item within shareholders' equity. (B)</p> Signup and view all the answers

<p>Retained earnings. (D)</p> Signup and view all the answers

<p>Net income / Shareholders' equity (B)</p> Signup and view all the answers

<p>Legally, the corporation is a separate entity from its owners. (D)</p> Signup and view all the answers

<p>Retained earnings decrease. (B)</p> Signup and view all the answers

A legal entity separate from its owners, known as shareholders.

Common and preferred shares are two classes of stock issued by corporations.

The process of offering shares of stock to investors in return for capital.

Payments made by a corporation to its shareholders from profits.

Profits that are not distributed as dividends but reinvested into the corporation.

A corporation with shares available for purchase on a public market.

A corporation whose shares are held by a small group of individuals and are not publicly traded.

A measure of a corporation's profitability that compares net income to shareholders' equity.

A corporation acts independently from its owners, protecting them from liabilities.

Shareholders are only responsible for company debts up to their investment amount.

Shares can be bought and sold freely without affecting the corporation's operation.

Corporations can raise funds by issuing shares to the public.

A corporation continues to exist even if ownership changes.

Shareholders have rights to vote, receive dividends, and claim assets during liquidation.

Elected by shareholders, they set policies and select corporate officers like the CEO.

The first sale of shares offered to the public by a corporation.

The price at which shares trade in the secondary market, influenced by supply and demand.

Share capital that cannot be distributed to shareholders and is considered protected.

Includes profit and cash distributions (dividends) to shareholders.

The process of selling shares for cash or in exchange for services/assets.

A financial statement outlining total retained earnings during a period, including profits and dividends.

The date to determine which shareholders will receive dividends.

The date when cash dividends are paid to shareholders.

Funds raised by issuing common and preferred shares.

Total profit or loss accumulated since incorporation.

Income not included in net income, used under IFRS.

Dividends reduce retained earnings when declared.

The residual interest in a corporation's assets after liabilities.

The residual interest in the assets of an entity after deducting liabilities. It includes common stock, preferred stock, and retained earnings.

A class of stock with preferential treatment in dividend payments and asset liquidation but typically lacks voting rights.

Payments made by a corporation to its shareholders, usually from profits, as a return on their investment.

A financial statement detailing the changes in retained earnings over a reporting period, including profits and dividends paid.

Shares that provide ownership in a corporation with voting rights; dividends are not guaranteed and can fluctuate.

Preferred shareholders receive dividends before common shareholders.

Shares that allow the owner to receive unpaid dividends from previous years before common dividends are paid.

The formal announcement by the board to pay a dividend, creating a legal obligation for the company.

Distribution of dividends based on the proportion of shares owned by each shareholder.

Dividends paid in the form of additional shares, typically common shares.

Once a dividend is declared, the corporation is legally obligated to pay it.