Accounting Tools

JULY 30, 2023

Capital in excess of par is the amount paid by investors to a company for its stock , in excess of the par value of the stock. Par value is the legal capital per share, and is usually printed on the face of the stock certificate. Some states allow for the issuance of stock that has no par value at all.

Financial Statements 75

Financial Statements Accounting Accounting 75

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APRIL 6, 2024

A corporation is a legal entity whose investors purchase shares of stock as evidence of their ownership interest in it. Corporation Ownership The base level of ownership in a corporation is common stock. What is a Corporation?

Corporation Tax 40

Corporation Tax Tax 40

Accounting Tools

APRIL 29, 2024

Stated value is the amount assigned to a share of stock and recorded in the issuer's accounting records. The amount of the stated value increases the capital stock account of the issuer when a share is issued. Example of Stated Value A company sells 100 common shares to investors for $10 per share. What is Stated Value?

Accounting 40

Accounting Accounting 40

Accounting Tools

DECEMBER 28, 2023

How to Calculate the Long-Term Debt to Equity Ratio To derive the ratio, divide the long-term debt of an entity by the aggregate amount of its common stock and preferred stock.

Financial Statements 75

Financial Statements 75

Accounting Tools

JULY 24, 2023

Common Stock Account The common stock account is used to accumulate the total amount of funds paid to a business for the par value of the shares that it sells to investors. Since par value is usually quite low, the balance in this account can be much higher than the balance in the common stock account.

Accounting 74

Accounting Accounting Corporate Finance 74

Accounting Tools

APRIL 29, 2024

What is Out of Stock? Out of stock is an inventory condition, stating that an item is not currently available for sale or use. An out of stock condition can cost a company a sale , so these items are usually closely monitored. There are several situations that can trigger an out of stock condition. Delayed stocking.

Accounting 40

Accounting Accounting 40

Accounting Tools

APRIL 18, 2024

What is Watered Stock? Watered stock is shares in a corporation that are sold at a price higher than the value of the underlying assets. For example, a stock promoter makes exaggerated claims about the future prospects of a company, convincing investors to buy up shares at an inflated price.

Auditing 40

Auditing 40

Accounting Tools

MARCH 19, 2024

What is Capital Stock? Capital stock is comprised of all types of shares issued by a corporation. An alternative definition of capital stock is that it is comprised of the total number of common shares and preferred shares that are authorized for issuance.

Corporate Finance 40

Corporate Finance Financial Statements Accounting Accounting 40

Accounting Tools

MAY 3, 2024

A contingent issuance refers to a possible issuance of common stock that will occur only if certain conditions have been satisfied. A business may issue bonds that can be converted into its common stock under conditions specified in the bond indenture agreement. What is a Contingent Issuance? Contingent share issuances.

CPA 40

CPA 40

Accounting Tools

SEPTEMBER 9, 2023

To calculate this market value, multiply the current market price of a company's stock by the total number of shares outstanding. This calculation should be applied to all classifications of stock that are outstanding, such as common stock and all classes of preferred stock. These factors are: Illiquid market.

Financial Analysis 75

Financial Analysis 75

Accounting Tools

JANUARY 12, 2024

What is Non-Participating Preferred Stock? Non-participating preferred stock is preferred stock that specifically limits the amount of dividends paid to its holders. This usually means that there is a specifically-mandated dividend percentage stated on the face of the stock certificate.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

FEBRUARY 8, 2024

What is Cumulative Preferred Stock? Cumulative preferred stock is an equity instrument that pays a fixed dividend on a predetermined schedule, and prior to any distributions to the holders of a company's common stock. The amount of the dividend is usually based on the par value of the stock.

Financial Statements 40

Financial Statements Corporate Finance Accounting Accounting 40

Accounting Tools

JANUARY 20, 2024

This means that such an instrument can be converted into a share of common stock. A reduced amount of earnings per share could drive away investors, thereby lowering the price of a company's stock. These are debt instruments that give the holder the option to convert them into common stock.

Accounting 40

Accounting Accounting 40

Accounting Tools

AUGUST 2, 2023

However, it is a common part of the annual financial statements. For example, it could separately identify the par value of common stock , additional paid-in capital , retained earnings , and treasury stock, with all of these elements then rolling up into the ending equity total.

General Ledger 74

General Ledger Financial Statements Accounting Accounting 74

Accounting Tools

MAY 10, 2024

What is Stock Option Backdating? Stock option backdating involves setting the issuance date of options prior to their actual issuance date. Understanding Stock Option Backdating Stock options give their holder the right to purchase the common stock of a corporation at a specific price.

Financial Statements 40

Financial Statements Auditing Tax Accounting 40

Accounting Tools

JUNE 12, 2023

An alternative approach for calculating total equity is to add up all of the line items in the stockholders' equity section of the balance sheet, which is comprised of common stock , additional paid-in capital , and retained earnings , minus treasury stock.

Financial Statements 75

Financial Statements Accounts Payable Accounts Payable Accounts Receivable 75

Accounting Tools

FEBRUARY 15, 2024

Par value is the stock price stated in a corporation’s charter. By setting the par value at the lowest possible unit of currency, a company avoids any trouble with future stock sales if its shares begin to sell in the penny stock range. What is Par Value Stock? What is No Par Value Stock?

General Ledger 40

General Ledger Bookkeeping Auditing Accounting 40

Accounting Tools

DECEMBER 20, 2023

A convertible security is a bond , preferred stock , or a similar financial instrument that can be converted into the common stock of the issuing entity. The value of the underlying call option increases as the market price of the common stock approaches the conversion price.

Corporate Finance 40

Corporate Finance Financial Statements Tax 40

Accounting Tools

JANUARY 12, 2024

Advantages of Non-Participating Shares Non-participating shares are less risky than common stock , since holders will still earn a return even when the issuing business does not earn a profit. Also, this dividend is paid before common shareholders are paid a dividend; this preference further reduces the risk to the holder.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

APRIL 16, 2024

Leave Books Open A common cooking the books practice is to leave the books open past the end of the month to record additional sales within the prior reporting period. Avoid Expense Recognition Another common practice is to not record expenses in the proper reporting period, even though they clearly reflect resource consumption in the period.

Auditing 74

Auditing Invoicing Accounting Accounting 74

Accounting Tools

MARCH 29, 2024

Face Value of a Bond A common application of the face value term is in regard to the face value of a bond. Face Value of Preferred Stock Face value can also apply to preferred stock , where the amount stated on a stock certificate is used to calculate the percentage dividend paid to investors.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

DECEMBER 25, 2023

It is paid out from the retained earnings of a business, and may be paid to the holders of common stock or preferred stock. If a dividend is in the form of more company stock, it may result in the shifting of funds within equity accounts in the balance sheet, but it will not change the overall equity balance.

Financial Statements 75

Financial Statements Bookkeeping Accounting Accounting 75

Accounting Tools

AUGUST 5, 2023

Related Courses Business Ratios Guidebook The Interpretation of Financial Statements What is the Common Stock Ratio? The common stock ratio measures the proportion of a company's total capitalization that is comprised of common stock.

Financial Statements 40

Financial Statements 40

Accounting Tools

DECEMBER 22, 2023

What is Noncumulative Preferred Stock? Noncumulative preferred stock allows the issuing company to skip dividends and cancel the company's obligation to eventually pay those dividends. Instead, the shares are effectively the same as common stock, where the issuance of dividends is at the prerogative of the board of directors.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

DECEMBER 22, 2023

Example of Nominal Capital A business sells 1,000,000 shares of its common stock to investors. Related Articles Impaired Capital Premium on Common Stock Stated Capital Stated Value Watered Stock Why Shares are Issued at a Premium These shares have a par value of $0.01 par value per share).

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40

Accounting Tools

NOVEMBER 26, 2023

What is a Stock Dividend? A stock dividend is the issuance by a corporation of its common stock to its common shareholders without any consideration. If the issuance is for a greater proportion of the previously outstanding shares, then treat the transaction as a stock split.

Accounting 40

Accounting Accounting 40

Accounting Tools

NOVEMBER 1, 2023

There are two general types of share capital, which are common stock and preferred stock. The characteristics of common stock are defined by the state within which a company incorporates. This dividend must be paid before the company can issue any dividends to its common stockholders.

Corporate Finance 40

Corporate Finance Accounting Accounting 40

Accounting Tools

AUGUST 3, 2023

Shareholders' funds are usually considered to be comprised of the common stock , preferred stock , retained earnings , and treasury stock accounts. Related Articles Assessable Capital Stock How to Calculate Stockholders’ Equity How to Calculate Total Equity Types of Equity

Tax 75

Tax Accounting Accounting 75

Accounting Tools

DECEMBER 14, 2023

What is Stock? Stock is a security that represents a fraction of the ownership of the issuing corporation. Investors by stocks in the expectation that their value will increase, allowing the investors to eventually sell them for a profit. The stocks may also pay out dividends on an annual or quarterly basis.

Financial Statements 40

Financial Statements Auditing Accounting Accounting 40

Accounting Tools

AUGUST 7, 2023

This cost represents the amount the market expects as compensation in exchange for owning the stock of the business, with all the associated ownership risks. The current market value of the stock is $20. The historical growth rate for the dividend payments has been 2%. The risk-free rate of return is derived from the return on a U.S.

Financial Analysis 75

Financial Analysis Budgeting 75

Accounting Tools

JULY 30, 2023

What is Voting Stock? Voting stock is shares in a business that give its holders the right to vote for matters brought up during shareholder meetings. Common stock is usually considered to be voting stock. Terms Similar to Voting Stock Voting stock is also known as voting shares.

Auditing 40

Auditing 40

Accounting Tools

JANUARY 30, 2024

A floorless bond is a bond whose terms allow purchasers to convert them to common stock , as well as any accrued interest. If a major bond holder were to convert all of its holdings to common stock, the result could be a major stock price decline, possibly resulting in a change of control in favor of the former bond holder.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

DECEMBER 26, 2023

Basic earnings per share is the amount of a company’s earnings allocable to each share of its common stock. It is a useful measure of performance for companies with simplified capital structures that only contain common stock. The reporting of basic earnings per share is not required for privately-held entities.

Tax 40

Tax Accounting Accounting 40

Accounting Tools

MAY 10, 2024

We explore the different types of market valuation approaches in this article. In the latter case, it may be necessary to use an average stock price over an extended period of time as the basis for a valuation. Related Articles How to Calculate the Market Value of Equity The Difference Between Forward P/E and Trailing P/E

Financial Analysis 40

Financial Analysis 40

Accounting Tools

DECEMBER 14, 2023

What is Redeemable Preferred Stock? Redeemable preferred stock is a type of preferred stock that allows the issuer to buy back the stock at a certain price and retire it, thereby converting the stock to treasury stock.

Corporate Finance 40

Corporate Finance 40

Accounting Tools

OCTOBER 15, 2023

Related Topics Accounting for Stock-Based Compensation Human Resources Guidebook What is a Stock Option? A stock option is a contract that allows its holder to either buy or sell a certain number of shares at a specific price and within a designated time period.

Accounting 40

Accounting Accounting 40

Accounting Tools

APRIL 12, 2024

A cash dividend is the most common form of dividend, paid solely in cash. Stock dividend. A stock dividend is the issuance of additional shares to investors. Related Articles Accounting for a Small Stock Dividend Are Dividends Considered an Expense? Does a Dividend Reduce Profit?

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Tax Accounting Accounting 40