Amount of capital issued to the shareholders.

A part of the issued share capital for which payment has been requested from shareholders.

A part of the called-up share capital for which the company has received payment from shareholders.

Preference shares which must be bought back by the company at an agreed date and for an agreed price.

Total funds provided by the shareholders of the company.

A long-term loan which has a fixed rate of interest, payable irrespective of the profit of the company. It is also known as Loan Notes.

_________ are part owners of a limited company. They are people or institutions who hold one or more shares in a company.

______ means that the risk or liability that each shareholder bears is limited to the value of the shares they hold.

A unit of investment in a company. These make up the capital of the company. They can have a nominal or face value of $ 0.50, $ 1, $ 10 etc.

A portion of a company’s earnings distributed to its shareholders.

________ form what is known as the equity of a company.

________ entitle their shareholders to certain rights which ordinary shareholders do not enjoy.

Profits ploughed back into the business. They are normally used for future expansion of the business, for example, a general reserve.

Process of selling all the assets of a business, paying off trade and other payables and any loans, then distributing any remaining funds between the shareholders.

Expenses that a company incurs which are not included in selling and distribution and finance costs.

For example, depreciation of equipment, rent.

Expenses incurred in the sales and promotion of the company’s products. For example, depreciation on motor vehicles used to deliver goods to customers, advertising and irrecoverable debts.

Expenses that are incurred when servicing a loan or a debenture, for example debenture interest.

A ________ records events that were responsible for the increase or decrease of total equity in an accounting period.

________ are paid, either half-yearly or quarterly, before the financial statements are prepared.

________ relating to the current year is the dividend which has actually been paid to the ordinary shareholders.

It is often referred to as an interim dividend. It appears in the statement of changes in equity.

_________ relating to the current year is what the directors are recommending be paid. This is often referred to as a final dividend.

It will not appear in the statement of changes in equity for the current year as it will not actually be paid until the following financial year.

Profit that is kept in the company and not paid out as dividends to shareholders. It is a very important source of finance for the business and is normally used for future growth. It is a reserve.

_________ is the sum of the ordinary share capital and ploughed back profits in the form of the general reserve and retained earnings.