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Chapter 14
Distributing Dividends and prepoaring a worksheet for a merchandising business
16
Accounting
11th Grade
04/15/2011

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Term
Retained Earnings
Definition
an amount earned by a corporation and not yet distributed to stockholders
Term
Dividends
Definition
earnings distributed to stock-holders
Term
Board of directors
Definition
a group of persons elected by the stockholders to manage a corporation
Term
declaring a dividend
Definition
action by a board of directors to distribute corporate earnings to stockholders
Term
merchandise inventory
Definition
the amount of goods on hand for sale to customers
Term
uncollectible accounts
Definition
accounts receivable that cannot be collected.
Term
allowance method of recording losses from noncollectable accounts
Definition
crediting the estimated value of uncollectible accounts to a contra account
Term
book value
Definition
the difference between an asset's account balance and its related contra account balance
Term
book value of accounts receivable
Definition
the difference between the balace of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts.
Term
current assets
Definition
cash and other assets expected to be exchanged for cash or consumed within a year
Term
plant assets
Definition
assets that will be used for a number of years in the operation of a business
Term
depreciation expense
Definition
the portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life
Term
estimated salvage value
Definition
the amount an owner expects to receive when a plant asset is removed from use
Term
straight line method of depreciation
Definition
charging an equal amount of depreciation expense for a plant asset in each year of useful life.
Term
accumulated depreciation
Definition
the total amount of depreciation expense that has been recorded since the purchase of a plant asset.
Term
book value of a plant asset
Definition
the original cost of a plant asset minus accumulated depreciation
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