Chapter 10 Flashcards
Another common term for stockholders’ equity is:
shareholders’ equity
_________ capital is the amount of money paid into a company by its owners.
paid-in
When a business incorporates, it must file its ______ with the state in which it incorporates.
articles of incorporation
True or false: The board of directors is responsible for establishing corporate policies.
True
Shareholders influence a company by
voting for the board of directors.
Shareholders’ equity is another common term for ______ equity. (Do not use shareholders)
Stockholders
The acronym “IPO” stands for
Initial public offering
The amount of money paid into a company by its owners is referred to as:
invested capital
A(n) _______ corporation is considered closely held with few owners, whereas a(n) _________ corporation is available to any investor who wants to purchase shares of stock on the stock exchange.
Private; Public
A business that incorporates must file a document with the state, which includes a description of the business activities, the shares to be issued, and the composition of the board of directors. Which of the following terms are used to describe this document?
Corporate charter
Articles of incorporation
Which of the following is included in the rights of common stockholders?
Right to vote
Which of the following are included in the duties of the board of directors?
Establish corporate policies.
Appoint officers to manage the corporation.
The advantages to the corporate form of business include
ease of raising capital.
transferability of ownership.
Who owns and controls a corporation?
Shareholders
The most important advantage to the corporate form of business is
limited liability
