Stockholders’ equity terminology (Learning Objectives 1 & 2) 10–15 min.

Match the following terms with the correct definition.

a. Common stock

b. Paid-in capital

c. Dividends

d. Legal capital

e. Outstanding stock

f. Par value g. Preferred stock h. Retained earnings i. Treasury stock j. Stockholders’ equity _____ 1. Paid-in capital plus retained earnings.

_____ 2. Capital from investments by the stockholders.

_____ 3. Capital earned through profitable operation of the business.

_____ 4. The basic form of capital stock.

_____ 5. Stock in the hands of stockholders.

_____ 6. Distributions by a corporation to its stockholders.

_____ 7. Stock that gives its owners certain advantages over common stockholders, such as the right to receive dividends before the common stockholders.

_____ 8. Arbitrary amount assigned to a share of stock at the time of incorporation.

_____ 9. The portion of stockholders’ equity maintained for the protection of creditors.

_____10. A corporation’s own stock that it reacquires.

AppendixLO1