Accounting Final Exam

Authorized Stock

Maximum # of shares that can be issued

Authorized and issued stock

Stock that has been issued but may or may not be held by stockholders

Authorized, issued, and outstanding stock

Stock that is held by stockholders

Preferred Stock

typically no voting rights, dividend preference and sets dividend rates

Common stock

Typically had voting rights and basic dividend rights

Combined sales

Not made at full fair value and have to allocate the sale price to each security sold

Non monetary issuance

Recorded at the most faithful amount

Stock split

Makes stock more approachable for everyday investors, changes market outlook, and no effect on accounting value on equity

Treasury Stock

No dividends paid on them

Contributed capital

Value that comes from stock transactions

Retained Earnings

Sole account used to keep up with earned capital and is a cumulative account

Dividend dates

Date of declaration and date of payment

Small stock dividends

Distributions of 25% or less of current outstanding stock and are valued at market value of stock as of date of declaration

Large stock dividends

Distribution of more than 25% of current outstanding shares and valued at par

EPS

Connects a company’s profit directly to each individual share of stock and it drives investor’s decisions and reflects company’s performance

Weighted average shares

Measures how long shares were outstanding, share only counts when it exits during the year, and eps matches shares with the time it was used