A304 MODULE 4 STUDY SET EXAM
QUESTIONS AND ANSWERS 100% PASS
_______ _______ is the amount stockholders have invested in the company. -
ANS Contributed capital (sometimes called "invested capital")
_______ _______ is the amount of earnings the company has kept or retained and not
distributed in dividends to stockholders over the life of the company. - ANS Retained earnings
_______ _______ is a company's own issued stock that it has repurchased. - ANS Treasury
stock
_________ (4 words) is the unrealized gains and losses from available-for-sale debt investments
(and other items related to foreign currency translation, derivatives, and pensions). -
ANS Accumulated other comprehensive income (AOCI)
How do sole proprietorships raise capital? - ANS Owner typically contributes all funds
How do partnership businesses raise capital? - ANS Partners contribute to capital
How do corporations raise capital? - ANS Selling stock
What are the advantages of corporations? - ANS -Limited liability
-Greater ability to raise capital and transfer ownership
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What are the owner rights of corporations? - ANS -Right to vote: Common stock (including
electing the board of directors)
-Right to receive dividends
-Right to share in the distribution of assets if the company is dissolved
What are the disadvantages of corporations? - ANS -Additional taxes (double taxation)
-More paperwork imposed by federal and state governments (and by securities regulators)
When companies seek investments during growth, what two things do they normally search
for? - ANS -Angel investors
-Venture capital firms
What is a wealthy investor called? - ANS Angel investor
What provides additional funding and business expertise? - ANS Venture capital funds
_______ (3 words) is the first time a corporation issues stock to the general public. -
ANS Initial public offering (IPO)
What are the four types of stocks? - ANS -Authorized
-Issued
-Outstanding
-Treasury
What are the shares available to sell called? - ANS Authorized
(= Issued + Unissued)
What are the shares actually sold called? - ANS Issued
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
QUESTIONS AND ANSWERS 100% PASS
_______ _______ is the amount stockholders have invested in the company. -
ANS Contributed capital (sometimes called "invested capital")
_______ _______ is the amount of earnings the company has kept or retained and not
distributed in dividends to stockholders over the life of the company. - ANS Retained earnings
_______ _______ is a company's own issued stock that it has repurchased. - ANS Treasury
stock
_________ (4 words) is the unrealized gains and losses from available-for-sale debt investments
(and other items related to foreign currency translation, derivatives, and pensions). -
ANS Accumulated other comprehensive income (AOCI)
How do sole proprietorships raise capital? - ANS Owner typically contributes all funds
How do partnership businesses raise capital? - ANS Partners contribute to capital
How do corporations raise capital? - ANS Selling stock
What are the advantages of corporations? - ANS -Limited liability
-Greater ability to raise capital and transfer ownership
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What are the owner rights of corporations? - ANS -Right to vote: Common stock (including
electing the board of directors)
-Right to receive dividends
-Right to share in the distribution of assets if the company is dissolved
What are the disadvantages of corporations? - ANS -Additional taxes (double taxation)
-More paperwork imposed by federal and state governments (and by securities regulators)
When companies seek investments during growth, what two things do they normally search
for? - ANS -Angel investors
-Venture capital firms
What is a wealthy investor called? - ANS Angel investor
What provides additional funding and business expertise? - ANS Venture capital funds
_______ (3 words) is the first time a corporation issues stock to the general public. -
ANS Initial public offering (IPO)
What are the four types of stocks? - ANS -Authorized
-Issued
-Outstanding
-Treasury
What are the shares available to sell called? - ANS Authorized
(= Issued + Unissued)
What are the shares actually sold called? - ANS Issued
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
