Potential Voting Rights That Cannot Be Exercised or Converted Until

question 33

True/False

Potential voting rights that cannot be exercised or converted until a future date or until the occurrence of a future event are not taken into account when determining an entity's capacity to control another entity.

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Definitions:

Paid-In Capital

The total amount of money that shareholders have invested in a company through the purchase of its stock.

Par Common Stock

The face value of common stock as stated in the corporate charter, which is the minimum amount at which shares can initially be sold.

Par Preferred Stock

A type of preferred stock that is issued at its nominal or face value, and typically has a fixed dividend rate.

Debit to Cash

An accounting entry that increases the cash balance in a company's books.