Shares Flashcards Preview

Principles of Financial Accounting > Shares > Flashcards

Flashcards in Shares Deck (13):
1

Market value =

Share price

2

Par (nominal value) =

Value of share when the company was incorporated

3

Authorised capital =

Maximum of share capital a company can issue

4

Issued capital =

Par amount of share capital issued to shareholders

5

Called up capital =

When shared are issued/ allotted, a company doesn't expect the full amount to be paid, they wait for a later date before the remainder is called up

6

Paid up capital =

When capital is called up, some shareholders might delay or default on their payment

7

Retained earnings =

Profits earned by a company and not appropriated by dividends, taxation or transfer to another reserve account

8

Equity shares double entry

DR Bank
CR Share Capital
CR Share Premium

9

Redeemable preference shares double entry

DR Cash
CR Redeemable preference shares

10

Bonus issue =

Shares offered to existing shareholders (always offered at par (nominal) value

11

Bonus issue double entry

DR Share premium
CR Share capital

12

Rights issue =

Usually discounted shares offered to existing shareholders

13

Rights issue double entry

DR Bank
CR Share Capital
CR Share Premium