Accounting Terminology Each of the Following Statements May (Or May Not) Describe

question 131

Essay

Accounting terminology.
Listed below are nine technical accounting terms introduced in this chapter:
$\begin{array}{lll}\text { Corporation } & \text { Par value } & \text { Dividend }\\\text { Preference share } & \text { Treasury share } & \begin{array}{l}\text { Issued and fully } \\\text { paid capital }\end{array} \\\text { Ordinary share } & \text { Underwriter } & \begin{array}{l}\text { Retained earnings }\end{array}\end{array}$ Each of the following statements may (or may not) describe one of these technical terms. In the space provided below each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
(a) The type of share whose owners have little say in management of the corporation and whose annual dividend is limited to a preset amount.
(b) Distribution of cash or other company assets to the owners of a corporation.
(c) An investment banking firm that guarantees an issuing corporation a specific price for a share issue and then makes a profit by selling the shares to the investing public at a higher price.
(d) Shares of a corporation's shares that have been issued and then reacquired, but not cancelled.
(e) An element of shareholders' equity arising from profitable operation of business.
(f) The type of share most likely to increase dramatically in value if the issuing corporation is extremely successful.
(g) Amounts invested in a corporation by its shareholders.

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Definitions:

Securities Exchange Act

A U.S. law governing the trading of securities (stocks, bonds, and securities futures) to protect investors against manipulation.

Insider Trading

The unauthorized use of secret information for making profitable trades on the stock market to benefit oneself.

Exemption From Registration

A situation where a party is relieved from the requirement to register information or activities with a governmental or regulatory authority.

Components Assembly Corporation

A business specializing in the process of assembling parts to create finished products, often in the manufacturing sector.