Introduction to Financial Statement Analysis: Corporations

Flashcards covering key concepts from corporate law and financial statement analysis.

What is a corporation?

An artificial being created by operation of law with rights, powers, and attributes authorized by law.

What are the characteristics of a corporation?

Greater capital, limited liability, better management, unlimited life, transferability of interest, and separate entity.

What is the difference between public and private corporations?

Public corporations govern a segment of the State while private corporations are organized by individuals for private aims.

What is a quasi-public corporation?

A private corporation that has accepted a grant from the State to perform public duties.

What is a stock corporation?

A corporation with capital stocks divided into shares authorized to distribute dividends to stockholders.

What is a non-stock corporation?

A corporation generally non-profit in nature, such as religious and charitable institutions.

What is a corporation aggregate?

A corporation composed of more than one member or stockholder.

What is a corporation sole?

A corporation composed of a single member and his successors in office.

What is the process of incorporation?

Involves promotion, incorporation with Articles of Incorporation, and commencement of business operations.

What are the rights of stockholders?

The right to vote, share in corporate profits, share in asset distribution upon liquidation, and pre-emptive rights.

What is the difference between common and preferred stock?

Common stock provides voting rights and dividends without priority, while preferred stock has preferential rights over dividends and assets.

What is par value stock?

A class of stock with a par value appearing on the certificate.

What is treasury stock?

Stock lawfully issued by the corporation and subsequently reacquired.

What does authorized capital refer to?

The maximum amount of capital a company is permitted to raise via the sale of stock.

What is bonus stock?

Stock issued to bond subscribers under the condition of receiving an equal amount of ordinary shares.