Organizational Forms
requires only an agreement between two or more persons to organize
What is a partnership?
gives the authority to any partner to legally bind the partnership and all other partners to business contracts
What is mutual agency?
$ amount assigned to each share
What is par value?
What are the three conditions to distribute cash dividends?
What is have sufficient retained earnings?
What is have sufficient cash?
What is have formal action by the BOD?
A ratio of 4:2:1 is the same as
What is 4/7:2/7:/1:7
Subject to federal income tax.
What is a corporation?
The debit balance in the owner's equity account of a partner.
What is a deficiency?
This account will be used if common stock is sold for more than the par amount
What is Paid in Capital in excess of par?
Three types of stock.
What is preferred stock, treasury stock, and common stock?
When forming a partnership, I bring equipment with a fair value of 10,000 and a book value of 8,000. What amount will I record?
What is the fair value amount? or 10,000
These represent the types of business organizations that use accounting.
What are 1)sole proprietorships, 2)partnerships and 3)corporations 4) LLC
Owners of a corporation
Who are stockholders?
The purpose is to reduce the market price per share and broaden number of stockholders.
What is stock split?
Who has first preference to dividends issued?
Who are Preferred stockholders?
How do partnerships share income and losses?
What is based on their ratios?
What is based on their contributions?
Name the corporation structure.
What is board of stockholders -> board of directors -> officers -> employees
Who has to take additional accounting class?
...
20,000 shares, $160 par value with a 4-for-1 stock split will result in
What is 80,000 shares, $40 par value.
(Multiply shares by 4, divide par value by 4)
The date when the board of directors *authorizes* payment of dividends
What is date of declaration?
The income paid out for a partnership with a net income of 250,000 and a 3:1 ratio will be
What is 187,500 and 62,500?
or
3/4:1:/4 ratio
Fair market value should be recorded at this time.
When is partnership formation?
Assets = Liabilities + Equity
What is the accounting equation?
Or what is the balance sheet?
Journalize stock issuance of 7,000 shares of common stock of $10 par value.
Dr. Cash $70,000
Cr. Common Stock $70,000
Net income of a partnership is 425,000, with salaries to the partners of 100,000 and 150,000 with a 4:1 ratio. Income amounts will be
What is 240,000 and 185,000?