Textbook: Financial and Managerial Accounting: The Basis for Business Decisions, 15th ed., by Williams

Answer exercise 11.2

Listed below are 12 technical accounting terms argue in the chapter:

Par value...................board of directors....... ..double taxation...........book value..........paid in capital dividends in arrears............market value...........preferred stock..........closely held corporation retained earnings ..............common stock........publicly owned corporation

Each of the subsequent statements may (or may not) explain one of these technical terms. For each statement, indicate the term describe, or answer (none ) if the statement does not correctly explain any of the terms.

a. A major disadvantage of corporate form organization

b. From investors' point of view, important value related with capital stock.

c. Cash available for distribution to stockholders

d. The class of capital stock that usually has the most voting power

e. A distribution of assets that can be made in the future years to the holders of common stock.

f. A corporation whose shares are traded on an organized stock exchange.

g. Equity arising from investments by owners

h. The element of stockholders equity that is increased by net income

i. Total assets divided by number of common shares outstanding

j. The class of stock for which market price usually rises as interest rate increases