Authorized shares of a corporation
A)are the minimum number of shares that must be issued.
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 are the maximum number of shares that a corporation is legally allowed to issue, as specified in its articles of incorporation. They do not directly increase shareholders' equity until issued and do not require a formal accounting entry just for being authorized.

Authorized Shares of a Corporation