会计英语 第四版 叶建芳08
合集下载
相关主题
- 1、下载文档前请自行甄别文档内容的完整性，平台不提供额外的编辑、内容补充、找答案等附加服务。
- 2、"仅部分预览"的文档,不可在线预览部分如存在完整性等问题,可反馈申请退款(可完整预览的文档不适用该条件!)。
- 3、如文档侵犯您的权益，请联系客服反馈,我们会尽快为您处理(人工客服工作时间：9:00-18:30)。
Corporate charter (filed with state).
Indicates maximum number of shares allowed to issue.
Owners’ equity called:
Shareholders’ or stockholders’ equity.
YE SUN AccountingEnglish
18
Appropriation of RE (Reserves)
Indicates retained earnings that are not available for dividends. For example, restricting dividends due to needs for planned future plant expansion. Not a reduction of RE. Just designating a portion of RE to be restricted for a specific purpose and thus not to be used for dividends. Appropriating RE does not mean that we are setting aside cash or other assets. That is a separate decision.
Shares traded. Subject to jurisdiction of SEC.
Private corpoБайду номын сангаасation:
Not publicly traded. Not subject to SEC.
YE SUN AccountingEnglish 7
Proprietorship Equity
YE SUN AccountingEnglish 20
Types of Dividends
Shareholder Sells Stock to Another Party
No affect on company accounts. Company notes change of owners and address of owners.
YE SUN AccountingEnglish
Partnership agreement defines split of profits among partners.
Otherwise, divided equally.
YE SUN AccountingEnglish
9
Ownership in a Corporation
Evidenced by stock certificate.
YE SUN AccountingEnglish 16
Accounting for Treasury Stock
Cost method (simpler method):
At acquisition, dr. Treasury stock (a contra account within shareholders’ equity) and cr. cash. If reissued above cost, credit a paid in capital account.
Legal liability
Empowered by state.
YE SUN AccountingEnglish 5
Disadvantages of Corporation Over Sole Proprietorship or Partnership
Costs to incorporate. Activities limited to those granted in charter. Additional regulations and requirements.
Capital account.
Drawing account (optional). Retained earnings (optional).
YE SUN AccountingEnglish
8
Partnership Equity
Separate capital account for each partner.
YE SUN AccountingEnglish 10
Preferred Stock
Usually issued with a face or par value.
In case of liquidation, entitled to receive par value after liabilities settled and before common shareholders receive anything. Pays stated dividend. Dividend is not tax deductible as is interest expense paid to debt holders.
SEC requires that it be shown on the BS between Liabilities and Owners’ Equity.
YE SUN AccountingEnglish 12
Common Stock (1 of 2)
Residual interest in net assets after all creditors and preferred shareholders.
If reissued below cost, dr. the same paid in capital account or retained earnings.
YE SUN AccountingEnglish
17
Retained Earnings
Cumulative net income earned since inception of company less cumulative total dividends paid.
YE SUN AccountingEnglish 11
Types of Preferred Stock
Cumulative preferred: dividends in arrears and current year’s dividends must be paid before common dividends can be paid. Convertible preferred: convertible into a specified number of shares of common. Redeemable preferred: may be redeemed by the investor on or after a certain date at a certain price (usually higher than its par value).
Legal Forms of Business: Sole Proprietorship
Owned by an individual.
Not legally separate from the owner. Cannot issue stock.
YE SUN AccountingEnglish 3
Legal Forms of Business: Partnership
Same features as sole proprietorship except owned by 2 or more partners. Limited partnerships.
Managed by general partner who has unlimited liability. Other partners have limited liability.
15
Treasury Stock
Corporation’s own stock that has been issued and reacquired. Reasons to reacquire own stock:
Limited investment opportunities. Stock price is low. To increase stock price. To increase EPS. Needed for acquisition. To issue stock bonus to employees. To prevent hostile takeover.
YE SUN AccountingEnglish 19
Legality of Dividends
Dividends come from present and past earnings in majority of states. Dividends come also from appreciation of assets in some states. Dividends restrictions are based on liquidity and solvency tests.
YE SUN AccountingEnglish 4
Legal Forms of Business: Corporation
Separate (artificial) legal entity. Perpetual existence.
Taxed.
Double taxation: corporation is taxed and dividends are taxable income to shareholders. Accrues to corporation itself; not to owners.
Par or stated value usually a nominal (meaningless) amount. Book value of common stock = total common shareholders’ equity. Common shareholders’ equity = Paid in capital + retained earnings.
YE SUN AccountingEnglish 13
Common Stock (2 of 2)
Paid in capital = Common stock at par (or stated value) + paid in capital in excess of par (also called “Additional paid in capital” or “Other paid in capital”)
Issuance cost.
Investment banker, legal, auditing, printing; subtracted from Additional paid in capital (shown net on the balance sheet).
YE SUN AccountingEnglish 14
Lesson 8
Owner’s equity
YE SUN AccountingEnglish
1
Principal Legal Forms of Business
Sole proprietorship. Partnership.
Corporation.
YE SUN AccountingEnglish 2
Must get permission from each state in which it operates. Double taxation.
YE SUN AccountingEnglish 6
Public vs. Private Corporations
Public corporation:
Indicates maximum number of shares allowed to issue.
Owners’ equity called:
Shareholders’ or stockholders’ equity.
YE SUN AccountingEnglish
18
Appropriation of RE (Reserves)
Indicates retained earnings that are not available for dividends. For example, restricting dividends due to needs for planned future plant expansion. Not a reduction of RE. Just designating a portion of RE to be restricted for a specific purpose and thus not to be used for dividends. Appropriating RE does not mean that we are setting aside cash or other assets. That is a separate decision.
Shares traded. Subject to jurisdiction of SEC.
Private corpoБайду номын сангаасation:
Not publicly traded. Not subject to SEC.
YE SUN AccountingEnglish 7
Proprietorship Equity
YE SUN AccountingEnglish 20
Types of Dividends
Shareholder Sells Stock to Another Party
No affect on company accounts. Company notes change of owners and address of owners.
YE SUN AccountingEnglish
Partnership agreement defines split of profits among partners.
Otherwise, divided equally.
YE SUN AccountingEnglish
9
Ownership in a Corporation
Evidenced by stock certificate.
YE SUN AccountingEnglish 16
Accounting for Treasury Stock
Cost method (simpler method):
At acquisition, dr. Treasury stock (a contra account within shareholders’ equity) and cr. cash. If reissued above cost, credit a paid in capital account.
Legal liability
Empowered by state.
YE SUN AccountingEnglish 5
Disadvantages of Corporation Over Sole Proprietorship or Partnership
Costs to incorporate. Activities limited to those granted in charter. Additional regulations and requirements.
Capital account.
Drawing account (optional). Retained earnings (optional).
YE SUN AccountingEnglish
8
Partnership Equity
Separate capital account for each partner.
YE SUN AccountingEnglish 10
Preferred Stock
Usually issued with a face or par value.
In case of liquidation, entitled to receive par value after liabilities settled and before common shareholders receive anything. Pays stated dividend. Dividend is not tax deductible as is interest expense paid to debt holders.
SEC requires that it be shown on the BS between Liabilities and Owners’ Equity.
YE SUN AccountingEnglish 12
Common Stock (1 of 2)
Residual interest in net assets after all creditors and preferred shareholders.
If reissued below cost, dr. the same paid in capital account or retained earnings.
YE SUN AccountingEnglish
17
Retained Earnings
Cumulative net income earned since inception of company less cumulative total dividends paid.
YE SUN AccountingEnglish 11
Types of Preferred Stock
Cumulative preferred: dividends in arrears and current year’s dividends must be paid before common dividends can be paid. Convertible preferred: convertible into a specified number of shares of common. Redeemable preferred: may be redeemed by the investor on or after a certain date at a certain price (usually higher than its par value).
Legal Forms of Business: Sole Proprietorship
Owned by an individual.
Not legally separate from the owner. Cannot issue stock.
YE SUN AccountingEnglish 3
Legal Forms of Business: Partnership
Same features as sole proprietorship except owned by 2 or more partners. Limited partnerships.
Managed by general partner who has unlimited liability. Other partners have limited liability.
15
Treasury Stock
Corporation’s own stock that has been issued and reacquired. Reasons to reacquire own stock:
Limited investment opportunities. Stock price is low. To increase stock price. To increase EPS. Needed for acquisition. To issue stock bonus to employees. To prevent hostile takeover.
YE SUN AccountingEnglish 19
Legality of Dividends
Dividends come from present and past earnings in majority of states. Dividends come also from appreciation of assets in some states. Dividends restrictions are based on liquidity and solvency tests.
YE SUN AccountingEnglish 4
Legal Forms of Business: Corporation
Separate (artificial) legal entity. Perpetual existence.
Taxed.
Double taxation: corporation is taxed and dividends are taxable income to shareholders. Accrues to corporation itself; not to owners.
Par or stated value usually a nominal (meaningless) amount. Book value of common stock = total common shareholders’ equity. Common shareholders’ equity = Paid in capital + retained earnings.
YE SUN AccountingEnglish 13
Common Stock (2 of 2)
Paid in capital = Common stock at par (or stated value) + paid in capital in excess of par (also called “Additional paid in capital” or “Other paid in capital”)
Issuance cost.
Investment banker, legal, auditing, printing; subtracted from Additional paid in capital (shown net on the balance sheet).
YE SUN AccountingEnglish 14
Lesson 8
Owner’s equity
YE SUN AccountingEnglish
1
Principal Legal Forms of Business
Sole proprietorship. Partnership.
Corporation.
YE SUN AccountingEnglish 2
Must get permission from each state in which it operates. Double taxation.
YE SUN AccountingEnglish 6
Public vs. Private Corporations
Public corporation: