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Egzaminy > International accounting standards 11 > Flashcards

International accounting standards 11 Flashcards

1
Q

Three primary forms of business organization:

A
  • proprietorship
  • partnership
  • corporation
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2
Q

Characteristics that distinguish (odróżniające) corporations from proprietorships and partnerships:

A
  • separate legal existence
  • transferable ownership rights
  • continuous life
  • government regulations
  • limited liability of shareholders
  • ability to acquire capital
  • corporate management
  • additional taxes
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3
Q

propietorship (znaczenie)

A

działalność gospodarcza

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4
Q

partnership (znaczenie)

A

spółka osobowa

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5
Q

legal entity (znaczenie)

A

osoba prawna

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6
Q

Shareholders rights in corporation:

A
  • vote in election of board of directors at annual meeting and vote on actions that require shareholder approval
  • share the corporate earnings through receipt of dividends
  • Keep the same percentage ownership when new shares are issued (preemptive right).
  • Share in assets upon liquidation in proportion to their holdings. This is called a residual claim
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7
Q

insuance (znaczenie)

A

emisja

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8
Q

When a corporation decides to issue shares, it must resolve a number of basic questions:

A
  • How many shares should it authorize for sale? (ile udziałów jest możliwe do sprzedania)
  • How should it issue the shares?
  • What value should the corporation assign to the shares?
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9
Q

Authorized Shares:

A
  • Charter indicates amount of shares that a corporation is authorized to sell
  • Number of authorized shares is often reported in equity section
  • No formal accounting entry
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10
Q

Issued shares:

A
  • Shares sold to investors
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11
Q

Outstanding shares (wyemitowane akcje)

A
  • Shares in the hands of investors
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12
Q

Equity is identified by various names:

A
  • stockholders’ equity,
  • shareholders’ equity, or
  • corporate capital
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13
Q

The equity section of a corporation’s balance sheet shows:

A
  • share capital and
  • retained earnings (earned capital).
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14
Q

Share Capital

A

Share capital is the total amount of cash and other assets paid in to the corporation by shareholders in exchange for shares.

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15
Q

Retained Earnings

A

Net income that a corporation retains for future use.

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16
Q

Par value:

A
  • Par value determined legal capital per share that a company must retain in business for protection of corporate creditors
  • Today many governments do not require (wymagać) a par value
  • No-par value shares is fairly common today
  • In many countries, a stated value is assigned to no-par shares
17
Q

Primary Objective

A

Primary Objective is to identify the specific sources of capital

18
Q

Issuing Par Value Ordinary Shares for Cash (znaczenie)

A

Emisja akcji zwykłych o wartości nominalnej za gotówkę

19
Q

Issuing Par Value Ordinary Shares for Cash:

A
  • Par value does not indicate a share’s market price
  • Cash proceeds from issuing par value shares may be equal to, greater than, or less than par value
  • Issuance of ordinary shares for cash: Credit par value of shares to Share Capital—Ordinary, Record in a separate account portion of proceeds that is above or below par value
20
Q

Corporations also may issue shares for:

A
  • Services (attorneys or consultants)
  • Non-cash assets (land, buildings, and
    equipment)
    Cost is either the fair market value of the consideration given up, or the fair market value of the consideration received, whichever is more clearly determinable
21
Q

Preference shares (znaczenie):

A

akcje uprzywilejowane

22
Q

Dividend Preference:

A
  • Distributions of earnings (dividends).
  • Generally non- voting rights.
23
Q

Voting preference:

A
  • More than one vote per share
  • No dividend preference
24
Q

What are treasury shares?

A

Treasury shares are a corporation’s own shares that it has reacquired (ponownie nabyte) from shareholders but not retired. (nie wycofane)

25
Q

treasury shares (znaczenie)

A

akcje skarbowe

26
Q

Corporations acquire treasury shares for various reasons:

A
  • To reissue the shares to officers and employees under bonus and share compensation plans.
  • To enhance (zwiększyć) the share’s market value.
  • To have additional shares available for use in the acquisition of other companies.
  • To increase earnings per share.
27
Q

Purchase of treasury shares:

A
  • Companies generally use cost method
  • Debit Treasury Shares for price paid to reacquire shares
  • Treasury shares is a contra equity account
  • Reduces equity
28
Q

What are dividends?

A

Distribution of cash or shares to shareholders on a pro rata (proportional to ownership) basis

29
Q

Types of Dividends:

A
  • Cash
  • Property
  • Shares
  • Scrip (promissory note to pay cash) - weksel własny na równowartość gotówki
30
Q

For a corporation to pay a cash dividend, it must have:

A
  • Retained earnings - Payment of cash dividends from
    retained earnings is legal in all jurisdictions.
  • Adequate cash
  • A declaration of dividends by Board of Directors.
31
Q

Cash dividends:

A
  • A declared cash dividend is a liability
  • Companies do not declare or pay cash dividends on treasury shares
  • Three dates: date of declaration, date of record, date of payment
32
Q

Dividend Preferences:

A
  • Right to receive dividends before ordinary shareholders
  • Per share dividend amount is stated as a percentage of preference shares par value or as a specified amount
  • Cumulative Dividend - Preference shareholders must be paid both current-year dividends and any unpaid prior-year dividends before ordinary shareholders are paid dividends
33
Q

Accounting for share splits:

A
  • Issuance of additional shares to shareholders according to their percentage ownership
  • Reduction in par or stated value per share
  • Increase in number of shares outstanding
  • Reduces market value of shares
  • ## No journal entry recorded, no effect on the balances in any equity accounts
34
Q

Retained earnings:

A

Includes net income that a company retains in the business
- Part of shareholders’ claim on total assets of
corporation
- Does not represent a claim on any specific asset
- Amount cannot be associated with the balance of any asset account

35
Q

What are Earnings per share?

A

Earnings per share is calculated as a company’s profit divided by the outstanding shares of its common stock.

36
Q

Earnings per Share (EPS) =

A

(Net income – Preference dividends )/Average number of ordinary shares outstanding

Egzaminy (19 decks)

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