CAPE Accounting - Shareholders'' Equity

The policy-making body in a corporation is called the board of directors.

• True

• False

The owner of 100 preference shares always has greater voting rights than the owner of 100 ordinary shares.

• True

• False

Par value shares are worth more than no-par shares.

• True

• False

Issuance of 1,000 $5 par value shares at $12 increases contributed capital by $12,000.

• True

• False

A corporation issues its preference shares in exchange for land and a building with a combined market value of $200,000. This transaction increases the corporation’s owners’ equity by $200,000 regardless of the assets’ prior book values.

• True

• False

Preference shares are a riskier investment than ordinary shares.

• True

• False

The maximum number of shares the company can issue under its constitution.

• Issued Shares

• Authorized Shares

• Outstanding Shares

• Treasury Shares

The number of shares that the shareholders own

• Issued Shares

• Authorized Shares

• Outstanding Shares

• Treasury Shares

The number of shares the company has issued to its shareholders.

• Issued Shares

• Authorized Shares

• Outstanding Shares

• Treasury Shares

Previously outstanding stock bought back from stockholders by the issuing company

• Issued Shares

• Authorized Shares

• Outstanding Shares

• Treasury Shares