The Authorized Stock of a Corporation

question 192

Multiple Choice

The authorized stock of a corporation

• A) only reflects the initial capital needs of the company.
• B) is indicated in its by-laws.
• C) is indicated in its charter.
• D) must be recorded in a formal accounting entry.

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Definitions:

Operating Expenses

Costs associated with the day-to-day functions of a business that are not directly tied to production.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, also known as shareholders' equity.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, showing the balance of income and expenditure over the preceding period.

Assets Decrease

Assets decrease refers to a reduction in the total value of a company’s assets, which can result from factors like asset sales, depreciation, or impairments.