Problem

Listed below are 12 technical accounting terms discussed in this chapter: Par valueBoar...

Listed below are 12 technical accounting terms discussed in this chapter:

Par value

Board of directors

Double taxation

Book value

Paid-in capital

Dividends in arrears

Market value

Preferred stock

Closely held corporation

Retained earnings

Common stock

Publicly owned corporation

Each of the following statements may (or may not ) describe one of these technical terms. For each statement, indicate the term described, or answer “None” if die statement does not correctly describe any of the terms.

a. A major disadvantage of the corporate form of organization.


b. From investors' point of view, the most important value associated with capital stock.


c. Cash available for distribution to the stockholders.


d. The class of capita! stock that normally has the most voting power.


e. A distribution of assets that may be made in future years to the holders of common stock.


f. A corporation whose shares are traded on an organized stock exchange.


g. Equity arising from investments by owners.


h. The element of stockholders' equity that is increased by net income.


i. Total assets divided by the number of common shares outstanding.


j. The class of stock for which market price normally rises as interest rales increase.

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