The stockholders’ equity account that reports the par or stated value of the issued shares of common stock. If the common stock does not have a par or stated value, this account will report the amount received when...
The stockholders’ equity account that reports the par or stated value of the issued shares of common stock. If the common stock does not have a par or stated value, this account will report the amount received when...
See paid-in capital in excess of par value – common stock.
The type of stock that is present at every corporation. (Some corporations have preferred stock in addition to their common stock.) Shares of common stock provide evidence of ownership in a corporation. Holders of common...
What is common stock? Author: Harold Averkamp, CPA, MBA Definition of Common Stock Common stock refers to the shares of ownership interest in a U.S. corporation. The owners of the common stock are referred to as common...
What is premium on common stock? Author: Harold Averkamp, CPA, MBA Definition of Premium on Common Stock If a corporation’s common stock has a par value and the corporation receives more than the par value when issuing...
A cash dividend that has been declared by the board of directors, but not yet paid.
A stated legal amount for each share of common stock. The par value for every share of common stock issued must be recorded in the separate stockholders’ equity account Common Stock.
What is common stock outstanding? Author: Harold Averkamp, CPA, MBA Definition of Common Stock Outstanding Common stock outstanding is defined as the shares of common stock that have been issued minus any shares of...
The issued shares of common stock minus the shares of treasury stock. The weighted average of the outstanding shares is used to compute the earnings per share.
Do corporations issue both common stock and preferred stock? Author: Harold Averkamp, CPA, MBA Some corporations issue both common stock and preferred stock. However, most corporations issue only common stock. In other...
A corporation’s net income after income taxes minus the dividends pertinent to the preferred shares of stock (if any).
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
What is the difference between par and no par value stock? Author: Harold Averkamp, CPA, MBA Definition of Par Value Stock Some states’ laws require or may have required common stock issued by corporations residing in...
The stockholders’ equity account that represents the amount paid to a corporation for its common stock that was in excess of the common stock’s par value. This account is sometimes referred to as the premium...
-in capital and as corporation’s permanent capital. Typically, a corporation issues shares of its common stock and receives cash for the stock’s fair market value. The transaction will be recorded with a debit to the...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
, statement of changes in shareholders’ equity, and statement of changes in equity) is one of the five required financial statements issued by a U.S. corporation whose common stock is publicly traded. This financial...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
What is the book value per share of stock? Author: Harold Averkamp, CPA, MBA Definition of Book Value per Share of Stock The book value of a corporation is the amount of its stockholders’ equity. Assuming the...
that have been issued and have not been reacquired by the issuing corporation are called __________ outstanding shares. 5. If a corporation has issued only one type of stock, it is __________ common stock. 6. The type...
a par value.) (Par value can also refer to an amount that appears on bond certificates.) In the case of common stock the par value per share is usually a very small amount such as $0.10 or $0.01 and it has no connection...
with the liability accounts) as sources of the amounts reported in the asset accounts. If the source of an asset was an investor purchasing new shares of common stock, the corporation would credit the stockholders’...
, and will not be reported as one of the expenses on the corporation’s income statement. Examples of Dividend Payments The cash dividends on a corporation’s common stock are not reported on the corporation’s income...
) the weighted average number of shares of common stock that are outstanding during the period of the earnings. If a corporation had preferred stock outstanding, the required preferred stock’s dividend is shown as a...
dividend. It will reduce the corporation’s assets and the stockholders’ equity account Retained Earnings. Examples of Dividends Jones Corporation has 100,000 shares of common stock outstanding. Each quarter, the...
What is the cost of capital? Author: Harold Averkamp, CPA, MBA Definition of Cost of Capital The cost of capital is the weighted-average, after-tax cost of a corporation’s long-term debt, preferred stock (if any), and...
What is capital surplus? Author: Harold Averkamp, CPA, MBA Definition of Capital Surplus In the past, capital surplus was used to describe what is now referred to as paid-in capital in excess of par or Premium on Common...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
Why are bonds payable less costly than common stock? Author: Harold Averkamp, CPA, MBA Bonds payable are less costly than common stock because the bonds issued by a corporation contain a formal contract to pay the...
The stockholders’ equity account that reports the amount paid to a corporation that is in excess of the common stock’s stated value. The stated value of each share issued is recorded in the Common Stock...
Used to calculate the earnings per share of common stock: Earnings available for common stock divided by the weighted-average number of shares of common stock outstanding. The weighted-average number of shares is needed...
a Corporation If Amy Ott decided to form a regular corporation and invest cash in exchange for shares of the new corporation’s common stock, Cash will be debited and the account Common Stock will be credited. (If the...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
What is a stock split? Author: Harold Averkamp, CPA, MBA Definition of Stock Split A stock split usually refers to a corporation dividing its existing number of shares of common stock into a greater number of shares. For...
What are the journal entries for a stock split? Author: Harold Averkamp, CPA, MBA Definition of a Stock Split A stock split usually increases the number of shares of a corporation’s common stock with the intention of...
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