| A | B |
|---|
| Appropriated Retained Earnigns | Retained earnings reported separately to inform stockholders of funding needs. (p. 491) |
| Authorized Stock | Total amount of stock that a corporation's charter authorizes it to sell. (p. 470) |
| Basic Earnings Per Share | Net income less preferred dividends divided by weighted-average common shares outstanding. (p. 489) |
| Book Value Per Common Share | Recorded amount of equity applicable to common shares divided by the number of common shares outstanding. (p. 493) |
| Book Value Per Preferred Share | Equity applicable to preferred shares (equals its call price [or par value if it is not callable] plus any cumulative dividends in arrears) divided by the number of preferred shares outstanding. (p. 493) |
| Call Price | Amount that must be paid to call and retire a preferred share. (p. 477) |
| Capital Stock | General term referring to a corporation's stock used in obtaining capital (owner financing). (p. 469) |
| Changes in Accounting Estimates | Revisions to previous estimates of future events and outcomes; accounted for in current and future periods. (p. 492) |
| Common Stock | A corporation's basic stock; usually carries voting rights for controlling the corporation. (p. 468) |
| Complex Capital Structure | Capital structure that includes outstanding rights or options to purchase common stock, or securities that are convertible into common stock. (p. 490) |
| Contributed Capital | Totaln amount of cash and other assets received from stockholders in exchange for stock. (p. 471) |
| Convertible Preferred Stock | Preferred stock with an option to exchange it for common stock at a specified rate. (p. 476) |
| Contributed Capital in Excess of Par Value | Difference between the par value of stock and its issue price when issued at a price above par. (p. 472) |
| Corporation | Entity created by law and separate from its owners. (p. 466) |
| Cumulative Preferred Stock | Preferred stock on which undeclared dividends accumulate until paid; common stockholders cannot receive dividends until cumulative dividends are paid. (p. 475) |
| Date of Declaration | Date the directors vote to pay a dividend. (p. 478) |
| Date of Payment | Date the corporation makes the dividend payment. (p. 478) |
| Date of Record | Date specified by directors for identifying stockholders to receive dividends. (p. 478) |
| Diluted Earnings Per Share | Earnings per share calculation that requires dilutive securities be added to the denominator of the basic EPS calculation. (p. 490) |
| Dilutive Securities | Securities having the potential to increase common shares outstanding; examples are options, rights, and convertible bonds and preferred stock. (p. 490) |
| Discount on Stock | Difference between the par value of stock and its issue price when issued at a price below par value. (p. 472) |
| Dividend in Arrears | Securities having the potential to increase common shares outstanding; examples are options, rights, and convertible bonds and preferred stock. (p. 490) |
| Dividend Yield | Ratio of the annual amount of cash dividends distributed to common shareholders relative to the common stock's market value (price). (p. 494) |
| Earnings Per Share (EPS) | amount of income earned by each share of a company's outstanding common stock; also called net income per share. (p. 489) |
| Extraordinary Gains or Losses | Gains or losses reported separately from continuing operations because they are both unusual and infrequent. (p. 486) |
| Financial Leverage | Earning a higher return on equity by paying dividends on preferred stock or interest on debt at a rate lower than the return earned with the assets from issuing preferred stock or debt. (p. 477) |
| Large Stock Dividend | Stock dividend that is more than 25% of the previously outstanding shares. (p. 480) |
| Liquidating Cash Dividend | Distribution of assets that returns part of the original investment to stockholders; charged to contributed capital accounts. (p. 479) |
| Market Value Per Share | Price at which stock is bought or sold. (p. 470) |
| Minimum Legal Capital | Amount of assets defined by law that stockholders must (potentially) invest in a corporation; usually defined as par value of the stock; intended to protect creditors. (p. 479) |
| Noncumulative Preferred Stock | Preferred stock on which dividends are limited to a maximum amount each year. (p. 476) |
| Nonparticipating Preferred Stock | Preferred stock on which the right to receive dividends is lost for any period when dividends are not declared. (p. 475) |
| Nonparticipating Preferred Stock | Preferred stock on which dividends are limited to a maximum amount each year. (p. 476) |
| No-Par Value Stock | Stock class that has not been assigned a par value by the corporate charter. (p. 471) |
| Organization Expenses (Costs) | Costs such as legal fees and promoter fees to bring an entity into existence. (p. 467) |
| Participating Preferred Stock | Preferred stock that shares with common stockholders any dividends paid in excess of the percent stated on preferred stock. (p. 476) |
| Par Value | Value assigned a share of stock by the corporate charter when the stock is authorized. (p. 470) |
| Par Value Stock | Class of stock assigned a par value by the corporate charter. (p. 470) |
| Preemptive Right | Stockholders' right to maintain their proportionate interest in a corporation with any additional shares issued. (p. 469) |
| Preferred Stock | Stock with a priority status over common stockholders in one or more ways, such as paying dividends or distributing assets. (p. 474) |
| Premium on Stock | Difference between the par value of stock and its issue price when issued at a price above par. (p. 472) |
| Price-Earnings (PE) Ratio | Ratio of a company's current market value per share to its earnings per share. (p. 494) |
| Prior Period Adjustment | Correction of an error in a prior year that is reported in the statement of retained earnigns (or statement of changes in stockholders' equity) net of any income tax effects. (p. 491) |
| Proxy | legal document giving a stockholder's agent the power to exercise the stockholder's voting rights. (p. 468) |
| Restricted Retained Earnings | Retained earnings not available for dividends because of legal or contractual limitations. (p. 491) |
| Retained Earnings | Cumulative income less cumulative losses and dividends. (p. 471) |
| Retained Earnings Deficit | Debit (abnormal) balance in retained earnings; occurs when cumulative losses and dividends exceed cumulative income. (p. 479) |
| Reverse Stock Split | Occurs when a corporation calls in its stock and replaces each share with less than one new share; increases both market value per share and any par or stated value per share. (p. 482) |
| Segment of a Business | Part of operations that serves a line of business or class of customers and that has assets, liabilities, and operating results distinguishable from other parts. (p. 486) |
| Simple Capital Structure | Capital structure that consists of only common stock and nonconvertible preferred stock; consists of no dilutive securities. (p. 490) |
| Small Stock Dividend | Stock dividend that is 25% or less of a corporation's previously outstanding shares. (p. 480) |
| Stated Value Stock | No-par stock assigned a stated value per share; this amount is recorded in the stock account when the stock is ussued. (p. 471) |
| Statement of Changes in Stockholders' Equity | Financial statement that lists the beginning and ending balances of each major equity account and describes all changes in those accounts. (p. 492) |
| Stock Dividend | Corporation's distribution of its own stock to its stockholders without the receipt of any payment. (p. 479) |
| Stockholders' Equity | A corporation's equity; also called shareholders' equity or corporate capital. (p. 471) |
| Stock Options | Rights to purchase common stock at a fixed price over a specified period of time. (p. 490) |
| Stock Split | Occurs when a corporation calls in its stock and replaces each share with more than one new share; decreases both the market value per share and any par or stated value. (p. 482) |
| Stock Subscription | Investor's contractual commitment to purchase unissued shares at future dates and prices. (p. 474) |
| Treasury Stock | Corporation's own stock that it reacquired and still holds. (p. 483) |
| Unusual Gain or Loss | Gain or loss that is abnormal or unrelated to the company's ordinary activities and environment. (p. 486) |
