Asked by William Burgan on May 09, 2024
Verified
Which of the following does not represent a description of shares of stock presented on the balance sheet?
A) Authorized shares.
B) Issued shares.
C) Outstanding shares.
D) Contributed shares.
Contributed Shares
Shares issued to investors or others as part of the equity financing of a company, represents part of the capital contributed by the shareholders.
Authorized Shares
The maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.
Balance Sheet
A financial statement that summarizes a company's assets, liabilities, and stockholders' equity at a specific point in time.
- Differentiate among authorized, issued, and outstanding stock shares.
Verified Answer
RV
Ricardo VidalMay 16, 2024
Final Answer :
D
Explanation :
"Contributed shares" is not a typical term used to describe shares of stock on a balance sheet. The other options are commonly used:
- "Authorized shares" refers to the total number of shares that a company is allowed to issue under its articles of incorporation.
- "Issued shares" represents the total number of shares that have been sold or distributed to investors.
- "Outstanding shares" refers to the total number of shares that are currently held by investors and are available for trading on the market.
- "Authorized shares" refers to the total number of shares that a company is allowed to issue under its articles of incorporation.
- "Issued shares" represents the total number of shares that have been sold or distributed to investors.
- "Outstanding shares" refers to the total number of shares that are currently held by investors and are available for trading on the market.
Learning Objectives
- Differentiate among authorized, issued, and outstanding stock shares.