Chapter 11 GLOSSARY REVIEW Flashcards
(28 cards)
Accumulated Other Comprehensive Income
This account includes the cumulative amount of all previous items reported as other comprehensive income.
Charter
A document that describes a corporation’s name and purpose, types of stock and number of shares authorized, names of individuals involved in the formation, and number of shares each individual has agreed to purchase.
Corporation
A company organized as a separate legal entity, with most of the rights and privileges of a person.
Cumulative Dividend
A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive any dividends.
Declaration Date
The date the board of directors formally authorizes the dividend and announces it to stock- holders.
Deficit
A debit balance in Retained Earnings.
Dividend
A distribution by a corporation to its stockholders
on a pro rata (proportional to ownership) basis.
Dividends in Arrears
Preferred dividends that were sup- posed to be declared but were not declared during a given period.
Legal Capital
The amount of capital that must be retained in the business for the protection of corporate creditors.
No-Par Value Stock
Capital stock that has not been assigned a value in the corporate charter.
Outstanding Stock
Capital stock that has been issued and is being held by stockholders.
Paid-In Capital
The amount stockholders paid in to the corporation in exchange for shares of ownership.
Par Value Stock
Capital stock that has been assigned a value per share in the corporate charter.
Payment Date
The date cash dividend payments are made to stockholders.
Treasury Stock
A corporation’s own stock that has been reacquired by the corporation and is being held for future use.
Stock Split
The issuance of additional shares of stock to stockholders accompanied by a reduction in the par or stated value per share.
Stock Dividend
A pro rata (proportional to ownership) distribution of the corporation’s own stock to stockholders.
Stated Value
The amount per share assigned by the board of directors to no-par stock.
Return on Common Stockholders’ Equity (ROE)
A mea- sure of profitability from the stockholders’ point of view; computed by dividing net income minus pre- ferred dividends by average common stockholders’ equity.
Retained Earnings Restrictions
Circumstances that make a portion of retained earnings currently unavailable for dividends.
Retained Earnings
Net income that a company retains in the business.
Record Date
Thedatewhenthecompanydeterminesowner- ship of outstanding shares for dividend purposes.
Publicly Held Corporation
A corporation that may have thousands of stockholders and whose stock is traded on a national securities market.
Privately Held Corporation
A corporation that has only a few stockholders and whose stock is not available for sale to the general public.
