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by John Smith on May 25th, 2009

John Smith

Question

Help answer this question below.

True or False?
1) The number of authorized shares should always equal or exceed the number of outstanding shares.

2) For accounting purposes, stated value is treated the same way as par value.

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Answers. Showing one answer.

  • by Andy_F on May 28th, 2009

    Andy_F

    1. True

    The First Answer, below, says that Statement 1 is "False" and then goes on to explain why it is actually "True." If "the number of authorized shares is equal to the total number shares that COULD be distributed [and] the number of outstanding shares is the number of shares that HAVE been distributed," then "the number of authorized shares should [must and will] always equal or exceed the number of outstanding shares." All outstanding shares are authorized but not all authorized shares are outstanding.

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