Wiley CPAexcel Exam Review 2014 Study Guide, Financial Accounting and Reporting

Module 15: Stockholders’ Equity

Overview

Stockholders’ equity is the residual of assets minus liabilities (i.e., net assets). Due to the number of fraudulent manipulations involving stocks, many states have legislated accounting for stockholders’ equity transactions, and they are controlled to some degree (e.g., conditions under which dividends may be paid).

A. Common Stock

B. Preferred Stock

C. Stock Subscriptions

D. Treasury Stock Transactions

E. Retirement of Stock

F. Dividends

G. Stock Splits

H. Appropriations of Retained Earnings (Reserves)

I. Share-Based Payments

J. Accounting Entries for the Share-Based Payments to Employees

K. Basic Earnings Per Share

L. Diluted Earnings Per Share

M. Corporate Bankruptcy

N. Reorganizations

O. Quasi Reorganization

P. Stock Rights

Q. Employee Stock Ownership Plan (ESOP)

R. Ratios

S. Research Component—Accounting Standards Codification

T. International Financial Reporting Standards (IFRS)

Key Terms

Multiple-Choice Questions

Multiple-Choice Answers and Explanations

Simulations

Simulation Solutions

This module covers accounts located within stockholders’ equity (e.g., common stock) and events affecting stockholders’ equity (e.g., bankruptcy).

Common stockholders’ equity consists of two major categories: contributed capital and retained earnings. Retained earnings are either appropriated or unappropriated. Paid-in capital consists of paid-in excess and legal capital. Legal capital is the par or stated value of stock.

When significant changes ...