Term
| definition of a fixed asset, provide at least 4 examples |
|
Definition
-tangible resource that you plan on having for more than a year, not intended for resale
-car
-tractor
-computers
-building |
|
|
Term
| what are the 3 methods of depreciation, what are the formulas for each |
|
Definition
-Straight line
Cost-salvage value/life expectancy
-Double declining
(straight line rate * 2) * (cost - accumulated depreciation)
-units of activity
(cost - slavage value) / est life in units |
|
|
Term
|
Definition
right to manufacture, sell, or use a particular product or process exclusive
for a limited period of time |
|
|
Term
|
Definition
| right to use exclusively a name, symbol or phrase to ID a company |
|
|
Term
|
Definition
| right to reproduce or sell and artistic or published work |
|
|
Term
|
Definition
| right to operate a business under the trade name of the franchises |
|
|
Term
|
Definition
| intangible asset equal to the excess that one company pays to aqcuire the net assets of another company |
|
|
Term
|
Definition
| (fixed assets on balance sheet)-expenditure that increases the expected useful life or productivity of a fixed asset |
|
|
Term
|
Definition
| (expense on the income statement)-expenditure that maintains the expected useful life or productivity of a fixed asset |
|
|
Term
| 4 criteria to show if a lease is operating lease or capital lease, what is the critical difference between the two? |
|
Definition
to be a capital:
-if the contract transfers ownership
-bargain purchase
-allows the lessee to use asset >=75% of useful life
-if the present value of the lessee lease payments >= 90% assets value
difference? off balance sheet financing |
|
|
Term
| 4 possible situations relative to contingent liabilites, identify them and the financial result of each |
|
Definition
-probable and can be estimated: report on balance sheet
-probable and can't be estimated: disclose notes in financial statements
-reasonably possible or cannot be estimated: disclose in notes
-remote: ignore |
|
|
Term
|
Definition
| assets = liabilities + equity |
|
|
Term
|
Definition
| revenues - expenses = net income |
|
|
Term
| statement of retained earnings format |
|
Definition
| beg balance + net income - dividends = ending balance |
|
|
Term
|
Definition
| operating activities +- investing activities +- financing activities = net increase/decrease in cash flow |
|
|
