Asked by Kelvin Gramajo on Jul 04, 2024
Verified
Authorized shares of a corporation
A) are the minimum number of shares that must be issued.
B) increase shareholders' equity.
C) are specified in its articles of incorporation.
D) must be recorded by a formal accounting entry.
Articles of Incorporation
Legal documents filed with a governmental body to legally document the creation of a corporation.
Authorized Shares
The legally allowed maximum issuance of shares by a corporation, as stated in its charter.
- Decrypt the features and rights of corporate ownership, considering liability, the transferability of shares, and the effects of transactions involving shares.
Verified Answer
ZK
Zybrea Knight
Jul 09, 2024
Final Answer :
C
Explanation :
Authorized shares are the maximum number of shares that a corporation is legally allowed to issue, as specified in its articles of incorporation. They do not directly increase shareholders' equity until issued and do not require a formal accounting entry just for being authorized.
Learning Objectives
- Decrypt the features and rights of corporate ownership, considering liability, the transferability of shares, and the effects of transactions involving shares.