Term
Establish Responsibilities Maintain adequate records Insure assets and bond key employees Separate recordkeeping from custody of assets Divide responsibility for related transactions Apply Technological Controls Perform Regular and independent reviews |
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Definition
7 Principles of Internal Control |
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Term
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Definition
| Amount of stock CORPORATE CHARTER allows you to issue |
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Term
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Definition
| Amount of stock you have issued |
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Term
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Definition
| Amount of shares that you have NEVER issued |
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Term
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Definition
| Amount of issued stock that is out on the market |
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Term
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Definition
| How much of the issue stock has been bought back by you, the company |
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Term
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Definition
| This is who investors are buying from when they buy stock (unless it's an IPO-initial public offering) |
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Term
Additional Paid In Capital (APIC) |
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Definition
| Contributed capital in excess of par value |
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Term
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Definition
| The day we say we will pay the dividend |
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Term
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Definition
| We will pay dividends to everyone who is a shareholder at this date |
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Term
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Definition
| The day we actually pay the dividend |
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Term
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Definition
Money moves from retained earnings into common stock and APIC when you issue this to shareholders This does not result in a change in overall equity because RE & CS & APIC are all OE accounts. It is just transfering funds from one to another |
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Term
a. Market Value b. Par Value |
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Definition
If the stock dividend is less than or equal to 25% then you record it at a BUT If the stock dividend is above 25% then you record it at b |
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Term
Split Stocks No journal Entry Required |
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Definition
This is when a company gives people more shares of stock, but everyone keeps the same percentage of company ownership What journal entry is recorded? |
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Term
Debit Cash Credit Common Stock Credit APIC (If applicable) |
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Definition
| What journal entry is recorded when you issue common stock? |
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Term
Debt (bank loans, bonds:borrowing) Equity (Stock) |
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Definition
| What are the 2 ways to finance a company? |
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Term
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Definition
What are A-E in terms of types of stock? Answers on page 4 of your TZ packet |
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Term
Retained Earnings & Contributing Capital |
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Definition
| What is owner's equity comprised of? |
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Term
Debit Retained Earnings (decreasing) Credit Common Stock (Increasing) Credit APIC-CS (Increasing) |
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Definition
How do you journalize the issuance of stock dividends?
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Term
Debit to Retained Earnings Credit to Dividends Payable None Debit to Dividends Payable Credit to Cash |
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Definition
What journal entry is made on the declaration date? What about Record Date? What about Payment Date? |
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Term
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Definition
| True or False: Buying and selling of treasury stock affects net income |
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Term
Treasury Stock! (Contra-Equity Account) |
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Definition
What type of stock takes away from contributed capital? |
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Term
| All the money is credited to common stock, no APIC |
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Definition
| What is different about a journal entry if you issue stock with no par value? |
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Term
Debit the Asset (Building) instead of cash Still Credit Common Stock & APIC |
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Definition
| What would the journal entry be if you issued stock in exchange for an asset such as a building? |
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Term
a.Participating Preferred b.Nonparticipating Preferred |
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Definition
a.This preferred stock gets not only the stated dividend, but also more sometimes b.This preferred stock gets only their stated dividend (almost all preferred stock) |
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Term
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Definition
| True or False: Dividends are only paid to outstanding stock |
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Term
APIC- Treasury Stock or Contributed Capital- Treasury Stock |
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Definition
| Where does money go that you make from treasury stock? |
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Term
Continuing Operations Discontinued Operations Extraordinary Items Changes in Accounting Principles Earnings Per Share |
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Definition
5 Parts of an Income Statement What are they? |
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Term
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Definition
The following equation calculates what? (Net Income - Preferred Dividends) / Weighted Average Common Shares Outstanding |
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Term
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Definition
The following equation represents what? Price Per Share(Market Price) Earnings Per Share |
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Term
| Restricted Retained Earnings |
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Definition
| Revenue set aside by company. Unable to pay out as dividends |
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Term
| Appropriated Retained Earnings |
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Definition
| Revenue set aside by company for some purpose. Unable to pay out as dividends |
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Term
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Definition
| If you made a mistake in a prior year, you must make a prior period adjustment to what account? |
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Term
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Definition
| Going through an income statement line by line and turning it into cash |
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Term
Step 1: Find Purchases (look at inventory) ending inv = beg inv + purch - cogs Step 2: Find Price Paid for Inventory (look at A/P) ending a/p = beg a/p + purch - cash paid |
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Definition
Two step approach to calculate cash paid for inventory (name 2 steps) (write equations) |
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Term
Operating Cash Flows Indirect (or Direct) |
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Definition
This type of cash flow includes all revenues and expenses Ex: Paying back interest expense Direct or Indirect Method? |
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Term
Investing Cash Flows Direct Method |
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Definition
This cash flow deals with the buying and leasing of long term assets Direct or Indirect Method? |
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Term
Financing Cash Flows Direct Method |
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Definition
This cash flow deals with issuing bonds, stocks, paying dividends, etc. Direct or Indirect Method? |
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Term
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Definition
| 2 people working together to screw the control system and steal or whatever |
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Term
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Definition
The following are _____ Balance Reconciliations. Are they plus or minus? NSF Checks Bank Service Charges Interest Earned Collections made by the Bank Bank Errors |
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Term
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Definition
The following are _____ Balance Reconciliations. Are they plus or minus? Outstanding Checks Deposits in Transit Bank Errors |
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Term
| Property, Plant, and Equipment |
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Definition
| Ch. 8 is about PPE. What is PPE? |
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Term
| Straight Line Depreciation Method |
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Definition
What does the following equation represent? Cost - Salvage Value Useful life in periods |
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Term
| Double-Declining-Balance Rate |
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Definition
What does the the following equation represent? First Step: (Straight-Line Rate X 2) = % Second Step: Multiple % by Beginning of Period Book Value |
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Term
| Units of Production Method |
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Definition
What does the following equation represent? Cost - Salvage Value Total Units of Production |
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Term
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Definition
The amount by which a company's value exceeds the value of its individual assets and liabilities Can include: superior management, skilled workforce, good supplier or customer relations, quality products or services, good location, or other competitive advantages |
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Term
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Definition
| Obligations due within one year or the company's operating cycle, whichever is longer |
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Term
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Definition
| A company's obligations not expected to be paid within the longer of one year or the company's operating cycle |
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Term
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Definition
| Aims to record expenses in the same accounting period as the revenues that are earned as a result of these expenses |
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Term
Debit A/P Credit Cash Credit Inventory (discount amount) |
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Definition
| What journal entry do we make if we pay within a certain time period and receive a purchase discount on an account payable? |
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Term
FOB Shipping Point (Free on Board) |
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Definition
| The point when ownership of goods passes to the buyer; which means the buyer pays shipping costs and accepts ownership of goods when the seller transfers goods carrier |
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Term
FOB Destination (Free on Board) |
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Definition
| The seller pays the shipping costs and the buyer accepts ownership of goods at the buyer's place of business |
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Term
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Definition
| Gross Sales - Contra Revenue Accounts = ? |
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Term
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Definition
| Net Sales - COGS expense = ? |
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Term
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Definition
| Gross Profit - Operating Expenses = ? |
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Term
Lower of Cost or Market (LCM) |
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Definition
| Inventory is adjusted to market when market is less than cost. You will record the _____ |
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Term
Each Individual Item Seperately To Major Categories of Items To the Entire Inventory |
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Definition
| In what 3 ways can the LCM be applied? |
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Term
%(net income - bonus) bonus = 40% (560,000 - bonus) bonus = 224,000 - .4bonus 1.4 = 224,000 Bonus is 160,000 |
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Definition
How do you calculate employees bonus? say you are giving them 40% of the net income which is 560,000. |
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