Chapter 11: Corporations

Question 1

Treasury Stock includes what type of shares

Answer 1

Authorized, issued, and currently owned by the corporation.

Question 2

Authorized Stock

Answer 2

The maximum number of shares that a corporation is allowed to sell.

Question 3

Issued Stock

Answer 3

The number of shares that the corporation has actually sold.

Question 4

Treasury Stock

Answer 4

Stock that a corporation has gone out out into the marketplace and purchased back from its own stockholders.
Treasury Stock is authroized stock that is issued and currently owned by the corporation. It represents the difference between the number of shares issued and the number of shares outstanding.

Question 5

Dividends on Common Stock are found in what financial statement?

Answer 5

Retained Earnings Statement
Since Dividends are not an expense, they are not placed on the income statement.
Dividends reduce retained earnings and are deducted from retained earnings in the retained earnings statement.
Dividends have already reduced the retained earnings shown on the balance sheet, so it’s not on the balance sheet.