Chapter 11 Terms Flashcards Preview

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Flashcards in Chapter 11 Terms Deck (24):
1

Authorized stock

The amount of stock that a corporation is authorized to sell as indicated in its charter.

2

Cash dividend

A pro rata (proportional to ownership) distribution of cash to stockholders.

3

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.

4

Corporation

A company organized as a separate legal entity, with most of the rights and privileges of a person.

5

Cumulative dividend

A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive any dividends.

6

Declaration date

The date the board of directors formally authorizes the dividend and announces it to stockholders.

7

Deficit

A debit balance in Retained Earnings.

8

Dividend

A distribution by a corporation to its stockholders on a pro rata (proportional to ownership) basis.

9

Dividends in arrears

Preferred dividends that were supposed to be declared but were not declared during a given period.

10

Legal capital

The amount of capital that must be retained in the business for the protection of corporate creditors.

11

No-par value stock

Capital stock that has not been assigned a value in the corporate charter.

12

Outstanding stock

Capital stock that has been issued and is being held by stockholders.

13

Paid-in capital

The amount stockholders paid in to the corporation in exchange for shares of ownership.

14

Par value stock

Capital stock that has been assigned a value per share in the corporate charter.

15

Payment date

The date cash dividend payments are made to stockholders.

16

Payout ratio

A measure of the percentage of earnings a company distributes in the form of cash dividends to common stockholders.

17

Preferred stock

Capital stock that has contractual preferences over common stock in certain areas.

18

Privately held corporation

A corporation that has only a few stockholders and whose stock is not available for sale to the general public.

19

Publicly held corporation

A corporation that may have thousands of stockholders and whose stock is traded on a national securities market.

20

Record date

The date when the company determines ownership of outstanding shares for dividend purposes.

21

Retained earnings

Net income that a company retains in the business.

22

Retained earnings restrictions

Circumstances that make a portion of retained earnings currently unavailable for dividends.

23

Stated value

he amount per share assigned by the board of directors to no-par stock.

24

Treasury stock

A corporation's own stock that has been reacquired by the corporation and is being held for future use.