Authorized shares of a corporation
A)reflect the initial capital needs of the company.
B)increase shareholders' equity.
C)are specified in its articles of incorporation.
D)must be recorded by a formal accounting entry.

Question

Quizplus · Accepted Answer

Authorized shares of a corporation are specified in its articles of incorporation. This document details the company’s legal structure, purpose, and authorized share count. The authorized shares are the maximum number of shares that the company can legally issue to shareholders. The number of authorized shares has no direct impact on the company's equity or accounting entries.

Authorized Shares of a Corporation