PAL Session ACCT 2121 10/30: Chapter 8

A business organization that is owned by a single individual

who is responsible for making business and profit

distribution decisions. Usually, no legal ownership

agreement is required

• Sole proprietorship

• Partnership

• Corporation

A business organization that is a separate legal entity created by the

authority of a state government. All states require the

application to provide articles of incorporation.

• Sole proprietorship

• Partnership

• Corporation

A business organization that allow persons to share their talents, capital,

and risks and rewards of ownership. Two or more

individuals share ownership

• Sole proprietorship

• Partnership

• Corporation

All of the following are advantages of corporations EXCEPT:

• Separate legal entity

• Easily transferable ownership rights

• Low level of government regulation

• Continuous life

Ownership of a corporation can be transferred through:

• exchanging stock certificates

• Legal action

• Negotiation

_______ is an arbitrary value assigned by the board of directors to stock

• par value

• book value

• market value

• stated value

________ is calculated by dividing total

Stockholder's equity (assets – liabilities) by the number of

shares of stock owned by investors.

• market value

• book value per share

• treasury stock

• par value

he maximum number of shares of stock

corporations are legally permitted to issue is called:

• issued stock

• authorized stock

• treasury stock

• outstanding stock

________ is when a corporation buys back some of

its issued stock from the public.

• issued stock

• authorized stock

• treasury stock

• outstanding stock

stock that has been sold to the public is called:

• issued stock

• authorized stock

• treasury stock

• outstanding stock