Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Characteristics of a Corporation

Financial Accounting

12. Stockholders' Equity

Characteristics of a Corporation

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Multiple Choice

Which of the following classifications represents the greatest number of shares of common stock for a corporation?

Issued shares

Treasury shares

Outstanding shares

Authorized shares

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Verified step by step guidance

Understand the definitions of the terms: Authorized shares, Issued shares, Treasury shares, and Outstanding shares. Authorized shares represent the maximum number of shares a corporation is legally allowed to issue as per its corporate charter. Issued shares are the portion of authorized shares that have been sold to investors. Treasury shares are shares that were issued but later repurchased by the company. Outstanding shares are issued shares minus treasury shares.

Recognize that authorized shares are the largest category because they represent the total number of shares a corporation can issue, while issued, treasury, and outstanding shares are subsets of this total.

Compare the classifications: Issued shares cannot exceed authorized shares, as they are a subset of authorized shares. Treasury shares are a subset of issued shares, and outstanding shares are issued shares minus treasury shares.

Conclude that authorized shares represent the greatest number of shares because they include all shares that could potentially be issued, regardless of whether they are currently issued, held as treasury shares, or outstanding.

To solidify understanding, visualize the relationship: Authorized shares > Issued shares > Outstanding shares (Issued shares - Treasury shares). This hierarchy helps clarify why authorized shares are the largest classification.