ACC/290 Principles of Accounting II
Week 3 May 16, 2013

Team A Reflection Summary In week three, Team A began to learn about equity and investments, and how they correspond with organizational accounting. Among these topics, we collectively have learned to understand, comprehend, and apply the types of stocks, how they pertain to corporations, and how corporations issue them. Also in week three, Team A became versed in splits of stock, and how they affect organizational accounting, dividends and how they affect stockholders, and bookkeeping. And finally Team A learned how transactions pertaining to treasury stock are recorded. Corporations have the ability to issue two major forms of stock. The first form is the most common, which is why it was aptly named, common stock. Common stock is generally the stock you hear about most is conversations from day to day. Common stock makes up the majority of all stock and comes with certain titles of responsibility, ownership and dividends. Those who hold common stock with a company they themselves now represent a “share” of ownership with said company. This grants them the entitlement to cast a vote, one per share owned, when the corporation is electing board members of other forms of management that greatly affect the future of the business. And most importantly, common stock gives you the right to your fair share of dividends or in other words a portion of the company’s profits. The second major form of stock is known as preferred stock. Similar to common stock the preferred stock does entitle you to a share of ownership with the company but generally preferred stock does not entitle voting rights like the common stock does. Conversely to common stock, the preferred stock is generally guaranteed a fixed rate of dividends, or share of company profits, while all