Understanding Share Capital and Treasury Stocks

These flashcards cover key concepts related to share capital and treasury stocks as discussed in the lecture.

No-par ordinary shares

Shares without a designated par value, credited to the Ordinary Shares account equal to cash proceeds when issued.

Ordinary Shares account

The account credited for the par value of shares sold, regardless of the sale price.

Treasury stock

Shares reacquired by the issuing corporation, not considered part of outstanding shares.

Legal capital

The minimum amount of paid-in capital that must remain in the corporation to protect creditors.

Share premium

The amount received from shareholders in excess of the par value of shares.

Retained earnings

The accumulated profits of a corporation that can be used for reinvestment or dividends.

Fair market value

The estimated amount for which an asset could be sold in a competitive and open market.

Par value

A nominal value assigned to shares and used to determine legal capital.

Outstanding shares

Shares currently held by shareholders, excluding treasury shares.

Dividend distribution

The process of disbursing a portion of a corporation's earnings to its shareholders.