Per Chapter 11 (assigned reading for Week 3), summarize in one page Microsoft Word all types of stocks that are issued by corporations and their definitions.
Par and No Par Value Stocks
Authorized stock The amount of stock that a corporation is
authorized to sell as indicated in its charter. (p. 514).
By-laws The internal rules and procedures for conducting
the affairs of a corporation. (p. 512).
Cash dividend A pro rata distribution of cash to stockholders.
Charter A document that creates a corporation. (p. 512).
Corporation A business organized as a legal entity separate
and distinct from its owners under state corporation
law. (p. 508).
Cumulative dividend A feature of preferred stock entitling
the stockholder to receive current and unpaid prior-year
dividends before common stockholders receive any dividends.
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Paid-in capital Total amount of cash and other assets paid in
to the corporation by stockholders in exchange for capital
stock. (p. 516).
Par-value stock Capital stock that has been assigned a
value per share in the corporate charter. (p. 515).
Payment date The date dividend checks are mailed to
stockholders. (p. 527).
Preferred stock Capital stock that has some contractual
preferences over common stock. (p. 524).
Prior period adjustment The correction of an error in previously
issued financial statements. (p. 535).
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Privately held corporation A corporation that has only a
few stockholders and whose stock is not available for sale
to the general public. (p. 509).
Publicly held corporation A corporation that may have
thousands of stockholders and whose stock is regularly
traded on a national securities exchange. (p. 508).
Record date The date when ownership of outstanding
shares is determined for dividend purposes. (p. 527).
Retained earnings Net income that a corporation retains
for future use. (pp. 516, 533).
Retained earnings restrictions Circumstances that make
a portion of retained earnings currently unavailable for
dividends. (p. 534).
Retained earnings statement A financial statement that
shows the changes in retained earnings during the year.
Return on common stockholders’ equity ratio A ratio
that measures profitability from the stockholders’ point of
Appendix 11A Stockholders’ Equity Statement 543
view. It is computed by dividing net income available to
common stockholders by average common stockholders’
equity. (p. 538).
Stated value The amount per share assigned by the board
of directors to no-par stock that becomes legal capital per
share. (p. 515).
Stock dividend A pro rata distribution of the corporation’s
own stock to stockholders. (p. 530).
Stock split The issuance of additional shares of stock to
stockholders accompanied by a reduction in the par or
stated value per share. (p. 532).
Stockholders’ equity statement A statement that shows
the changes in each stockholders’ equity account and in
total stockholders’ equity during the year. (p. 537).
Treasury stock A corporation’s own stock that the corporation
has issued, fully paid for,