Financial Accounting: In an Economic Context

KEY TERMS

Note: Definitions for these terms are provided in the glossary at the end of the text.

Accumulated comprehensive income (p. 540)

Appropriation of retained earnings (p. 566)

Authorized (shares) (p. 548)

Book value (of company/share) (p. 540)

Contributed capital (p. 540)

Cumulative preferred stock (p. 550)

Date of declaration (p. 561)

Date of payment (p. 561)

Date of record (p. 561)

Dilution (p. 544)

Dividends in arrears (p. 550)

Earned capital (p. 540)

Issued (shares) (p. 548)

Leverage (p. 544)

Market-to-book ratio (p. 553)

Market value (of stock) (p. 552)

Net assets (p. 540)

Net worth (p. 540)

Ordinary stock dividends (p. 564)

Outstanding (shares) (p. 548)

Par value (p. 553)

Participating (preferred stock) (p. 550)

Preferred stock as to assets (p. 548)

Preferred stock as to dividends (p. 548)

Prior period adjustments (p. 567)

Residual interest (p. 543)

Statement of shareholders' equity (p. 567)

Stock dividends (p. 561)

Stock options (p. 559)

Stock split (p. 563)

Stock splits in the form of dividends (p. 563)

Takeover (p. 545)

Treasury stock (p. 545)

Value creation (p. 569)

ETHICS in the Real World

Two years in a row, Hampton Industries, a men's clothing manufacturer that relies heavily on low-cost labor in Third-World countries, declared 10 percent stock dividends. Although no assets were transferred to shareholders, millions of dollars were transferred from retained earnings to the common stock and paid-in capital accounts. More recently, the company faced some very ...