Accounting 101 Chapter 10-11 Review Exam Questions And All Correct Answers.
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Course
Accounting 101
Institution
Accounting 101
paid-in capital - Answer the amount stockholders have invested in the company
retained earnings - Answer Represents all net income, less all dividends, since the company began
Treasury Stock - Answer a corporation's own stock that it has acquired
Invested Capital - Answer the a...
Accounting 101 Chapter 10-11 Review
Exam Questions And All Correct
Answers.
paid-in capital - Answer the amount stockholders have invested in the company
retained earnings - Answer Represents all net income, less all dividends, since the company began
Treasury Stock - Answer a corporation's own stock that it has acquired
Invested Capital - Answer the amount of money paid into a company by its owners
Corportation - Answer an entity that is legally separate from its owners and even pays its own income
taxes
articles of incorporation - Answer describes the nature of the firm's business activities, the shares to be
issued, and the composition of the initial board of directors
organization chart - Answer traces the line of authority within the corporation
Stages of Equity Financing - Answer 1) investment by the founders of business
2) investment by friends and family of founders
3) outside investment by "angel" investors and venture capital firms
4) initial Public Offering (IPO)
angle investors - Answer wealthy individuals in the business community willing to risk investment funds
on a promising business venture
, venture capital firms - Answer provide additional financing, often in the millions, for a percentage
ownership in the company
Inital Public Offering (IPO) - Answer the first time a corporation issues stock to the public
publicly held corporation - Answer Allows investment by the general public and is regulated by the
Securities and Exchange Commission
privately held corporation - Answer does not allow investment by the general public and normally has
fewer stockholders
Stockholder Rights - Answer 1. right to vote
2. right to receive dividends
3. right to share in the distribution of assets (liquidation)
limited liability - Answer Stockholders in a corporation can lose no more than the amount they invested
in the company
Another advantage of a corporation - Answer ability to raise capital and transfer ownership
disadvantage of corporation - Answer double taxation, more paperwork
double taxation - Answer corporate income is taxed once on earnings at the corporate level and again
on dividends at the individual level
S corporation - Answer allows a company to enjoy limited liability as a corporation, but tax treatment
as a partnership
authorized stock - Answer the total number of shares available to sell, stated in the company's articles
of incorporation (not recorded in the accounting records)
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