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What are the 4 common stock holder's rights?
RIGHT TO: 1.VOTE 2.Recieve dividends/PR 3.assests upon liquidation 4.Preemptive right
What is preemptive right?
The right of first refusal on any offer...must maintain % of ownership
What is Preffered stock? 4 points
1.Don't have the right to vote 2.May have the right to recieve dividends and 3.assets upon liquidation over common 4. No preemptive rights
What are some features of preffered stock?
1.Cummulative preffered 2.Participation preffered 3.Convertible preffered
What is cummulative preffered?
any dividends of pst year must be paid before common (preffered stock feauture)
What is participation preffered?
gets dividends but must participate and commom gets dividends too (preffered stock feauture)
What is convertible preferred?
can be changed to common stock(preffered stock feauture)
What are cash dividends?
cash distribution of earnings by a corporation to its shareholders
What are the three conditions that a corp. must meet in order to pay a CASH DIVIDEND?
1. Sufficient retained earnings 2.Sufficient cash 3.Formal action by the board of directors
What are stock dividends?
a distribution of shares of stock to stockholders
WHat is the effect of stock dividend on the STOCKHOLDER's EQUITY?
trnsfer RETAINED EARNING to PAID-IN-CAPITAL(fair market value)
What is stock split?
corporations reduce the par or stated value of their common stock and issue a proportionate number of additional share
WHy do corporations do stock splits?
to reduce the market price per share of the stock in order to attract investors and increase the types and numbers of stockholders
**??What is a reverse stock split?
when an investor is selling to smll and they want to manipulate the stock price by making every 2 shares of stock 1
Why do they co. use Revers stock split?
PR and to increase stockholders
What is par value?
arbitrary value established by the organizers/encorporaters
What is comprehensive income? a.)Where does it show up and b.)what is the balance?
anything that affects dividends and investments a.) Balance Sheet b.)
What is in the numerator for the computation of earnings per share?
NET INCOME - PREFFERED STOCK DIVIDENDS
What is in the denomanator for the computation of earnings per share?
WIEGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
What is the order of presentation of items on the income statement?
1.Income from continuing operations 2.Loss on discounted operations 3.Income before extraordinary items 4.extraordinary items 5.Net Income
Identify Unusual items that affect the current period
1)FIxed assest impairments 2)restructuring charges 3.) discounted operations 4) Extraordinary Items
Identify Unusual items that affect the period
1)errors 2) change in accounting principles
What are the accounting treatments for Equity secutirites?
current asset ,balance sheet, normal balance debit
What are the accounting treatments for trading securities?
What are the accounting treatments for available-for-sale securities?
expected to be sold in the future CLASSIFIED *AS TEMPORARY INVESTMENTS CURRENT *ASSEST ACCOUNT (DEBIT)* *BALANCE SHEET*
What are convertible bonds?
at a certain time and certain rate bond holder can convert to common stock
What are Callable bonds?
Bond holders reserves the right to redeem before their maturity
What are Redeemable bonds?
company can buy back bonds at a certain time and certain rate
What are CORPORATE bonds?
co that wnats to borrow money but needs to finance through an outside source
What is a cereal bond?
Multiple maturities
What are GOvernment bonds?
debts of the government 2. least risky 3. FULL FAITH ND CREDIT- almost impossible for them to not be paid 4. Easily transferrable
What are STATE/MUNICIPAL bonds?
1.low interest rate 2.exempt from taxation for Federal reasons
What are the two types of Municipal/state bonds?
1.general obligation bonds-full faith and credit 2.REvenue bonds- revuenue of state will go to pay of debt
ALL RISK IS GOVERNED BY...
US GOV. BONDS
What is discount?
when the bond rate/stated rate is lower than the market rate
What is premium?
when the stated rate/bond rate is higher than market rate
What does extraordinary income mean?
What actions are taken for an ASSET IMPAIRMENT?
LOSS ON FIXED ASSET IMPAIRMENT would be debited the equipment would be credited for the same amount
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