Authorized stock: The amount of stock that a corporation is authorized to sell as indicated in its charter. By-laws: The internal rules and procedures for conducting the affairs of a corporation. Cash dividend: A pro rata distribution of cash to stockholders. Charter: A document that creates a corporation. Common stock: Capital stock that is voting stock of a corporation. Corporation: A business organized as a legal entity separate and distinct from its owners under state corporation law. Corporate capital: The owners' equity in a corporation. Also called stockholders' equity or shareholders' equity. Cumulative dividend: A feature of preferred stock entitling the stockholder to receive current and unpaid prior-year dividends before common stockholders receive any dividends. Declaration date: The date the board of directors formally declares the dividend and announces it to stockholders. Deficit: A debit balance in retained earnings. Dividend: A distribution by a corporation to its stockholders on a pro rata (proportional) basis. Legal capital: The amount per share of stock that must be retained in the business for the protection of corporate creditors. Liquidating dividend: A dividend declared out of paid-in capital. No-par value stock: Capital stock that has not been assigned a value in the corporate charter. Organization costs: Costs incurred in the formation of a corporation. Outstanding stock: Capital stock that has been issued and is being held by stockholders. Paid-in capital: Legal capital plus contributed capital in excess of par or stated value. Par value stock: Capital stock that has been assigned a value per share in the corporate charter. Payment date: The date dividend checks are mailed to stockholders.

Preferred stock: Capital stock that has contractual preferences over common stock in certain areas. Prior period adjustment: The correction of an error in previously issued financial statements. Privately held corporation: A corporation that has only a few stockholders and whose stock is not available for sale to the general public. Publicly held corporation: A corporation that may have thousands of stockholders and whose stock is regularly traded on a national securities exchange. Record date: The date when ownership of outstanding shares is determined for dividend purposes. Retained earnings: Net income that is retained in the business. Retained earnings restrictions: Circumstances that make a portion of retained earnings currently unavailable for dividends. Retained earnings statement: A financial statement that shows the changes in retained earnings during the year. Return on common stockholders' equity ratio: A ratio that measures profitability from the stockholders' point of view. It is computed by dividing net income available to common stockholders by average common stockholders' equity. Stated value: The amount per share assigned by the board of directors to no-par stock that becomes legal capital per share. Stock dividend: A pro rata distribution of the corporation's own stock to stockholders. Stock split: The issuance of additional shares of stock to stockholders accompanied by a reduction in the par or stated value per share. Stockholders' equity statement: A statement that shows the changes in each stockholders' equity account and in total stockholders' equity during the year. Treasury stock: A corporation's own stock that has been issued, fully paid for, and reacquired by the corporation but not retired.