Term
| how to calculate net receivable? |
|
Definition
| = accounts receivable - allowance for doubtful accounts |
|
|
Term
|
Definition
| a different class of ownership shares where the dividend is fixed |
|
|
Term
| what are the components of stockholder's equity? |
|
Definition
a. retained earnings
b. dividends paid
c. treasury stock |
|
|
Term
| what are retained earnings?? |
|
Definition
| profits from the business that havent been distributed to the owners |
|
|
Term
| What is the effect of the LIFO method? |
|
Definition
| reduces ending inventory and increases COGS weighted average |
|
|
Term
| how to calculate the average unit cost using the average cost method |
|
Definition
| total cost of units available for sale/ units available for sale |
|
|
Term
| how to calculate inventory |
|
Definition
| = cost of goods sold/ average inventory |
|
|
Term
| how to calculate average inventory |
|
Definition
| =(beginning inventory + ending inventory) / 2 |
|
|
Term
| How do you calculate the earnings per share |
|
Definition
| = net income/ average number of shares outstanding per period |
|
|
Term
| how to calculate depreciation using the straight line method |
|
Definition
| = (cost-residual value)/life in years |
|
|
Term
| how to calculate depreciation using the units of production method? |
|
Definition
A. = (cost-residual value)/ life in units of production
B. = Depreciation rate * number of units produced for the year |
|
|
Term
| how to calculate depreciation using the accelerated method |
|
Definition
double the straight line rate.
= net book value * (2/useful life in years) |
|
|
Term
| how to calculate depletion rate |
|
Definition
| =(Aquisition and development cost - residual value)/estimated receivable units |
|
|
Term
| what are the two types of depreciation |
|
Definition
| physical depreciation and functional depreciation |
|
|
Term
| what is functional depreciation? physical? |
|
Definition
physical: factoes include wear and tear during use or from exposure to the weather
functional: changes in customer needs that cause the asset to no longer produce services |
|
|
Term
| what are the three factors in calculating depreciation |
|
Definition
A. acquisition cost (what did it cost)
B. how long will it function
C. scrap value |
|
|
Term
| What are the common methods of depreciation? |
|
Definition
A. Straight line
B. Units of production
C. Accelerated method/ declining balance |
|
|
Term
| What are intangible assets? |
|
Definition
|
|
Term
|
Definition
| tangible assets are owned and used by the company in its normal operations |
|
|
Term
| What is the difference between period and capital expenditures |
|
Definition
period expense is a normal and ordinary repair that does not prolong the useful life of the asset
capital expenditure: additions, improvements |
|
|
Term
|
Definition
| periodic recording of the cost of fixed assets as an expense |
|
|
Term
|
Definition
| financial accountant is an external accountant who makes sure the company is providing accurate and compile info through auditing |
|
|
Term
| what is meant by the matching concept |
|
Definition
| match related expenses and revenue within the correct time period |
|
|
Term
|
Definition
| amounts that customers owe for which a formal, written instrument of credit has not been issued |
|
|
Term
| how do you calculate the bad debt expense |
|
Definition
|
|
Term
| which bad debt expense recording method is not permissable |
|
Definition
|
|
Term
| the term management accounting refers to ____ |
|
Definition
| internal accountants that provide internal managers with management or operational information |
|
|
Term
| debit where its coming from |
|
Definition
|
|
Term
|
Definition
| an asset that the company has not yet benefitted from. Neither an expense or revenue (insurance) |
|
|
Term
| What are the advantages of elctronic funds transfer |
|
Definition
A. employees do not handle cash
B. funds received can be spent immidiately
C. Fewer customers pay bills late
D. EFT funds can be processed more quickly |
|
|
Term
| what is the purpose of a statement of cash flows? |
|
Definition
to disclose :
transactions that are not clear
how much cash came in during a period
where the cash came from and where it was spent |
|
|
Term
| what is the purpose of preforming a bank reconcilliation |
|
Definition
| ensure that the companys cash balance is complete and accurate |
|
|
Term
| What are part of a statement of cash flow? |
|
Definition
cash from operations
sources and uses of cash from financing activities
sources and uses of cash of investing activities |
|
|
Term
| is par value a requirement in the US |
|
Definition
| No, only some states require it |
|
|
Term
| when must a company journalize a liability to pay its next dividend payment to shareholders |
|
Definition
| dividend decleration date |
|
|
Term
| what effect does a stock dividend have on the market price |
|
Definition
| the market price of common stock will decline at first |
|
|
Term
| what are the factors used in computing gross profit |
|
Definition
| sales, sales returns, opening inventory, materials cost, labor costs, and direct overhead |
|
|
Term
| when should a company disclose a potential loss in the footnotes? when should it be journalized |
|
Definition
footnotes - when a lawyer says that a loss is probable
journalized- when it is probable and the amount is estimatable |
|
|
Term
|
Definition
| stock that a company has repurchased and it is not unissued stock |
|
|
Term
| what are the components of stockholders' equity? |
|
Definition
a. common stock
b. paid in capital
c. retained earnings |
|
|
Term
| what is the par value of common stock? |
|
Definition
| price of the common stock that is included in the corp. articles of incorporation. Not neccesarily the price that investors must pay when they buy comapny stock |
|
|
Term
| what are the typical sources of corporate capital |
|
Definition
long term bank loan
net income
equity capital |
|
|
Term
| what is a long term liability |
|
Definition
| money owed by the company that must be paid to vendors, etc. Lasting longer than a year |
|
|
Term
| what are the intergral parts of a financial statement |
|
Definition
| statement of income, statement of financial position (balance sheet), statement of cash flow, footnotes and auditors report |
|
|
Term
| what are the differences between an operating lease and a capital lease |
|
Definition
| capital lease make the transaction closely resemble a purchase while an operating lease resembles more of a rental |
|
|
Term
| which inventory method is most likely to produce the highest ending inventory |
|
Definition
| first in- first out method |
|
|
Term
| what is the FIFO methods impact on gross profit? |
|
Definition
| gross profit would increase |
|
|
Term
| which concept of bad debts is permissable for use in financial reporting |
|
Definition
| allowance for doubtful accounts or bad debt provision method |
|
|
Term
| what are current liabilities |
|
Definition
| money owed by the company that the company miust pay within a year |
|
|
Term
| cost of goods sold for manufacturing companies is reported in financial statements |
|
Definition
|
|
Term
| what are goods available for sale |
|
Definition
| good produced during the year plus inventory |
|
|
Term
| what is the calculation for cost of goods sold |
|
Definition
| = open inventory + cost of production - closing inventory |
|
|
Term
| what are the five C's of credit |
|
Definition
| character, capacity, capital, collateral, conditions |
|
|
Term
| explain the relationship of character as it pertains to credit |
|
Definition
| the borrower's willingness to pay based on their payment history |
|
|
Term
| explain the relationship of capacity as it pertains to credit |
|
Definition
| the borrowers likeliness to pay based on prediction of their future income |
|
|
Term
| explain the relationship of capital as it pertains to credit |
|
Definition
| how much money the borrower has to fall back on |
|
|
Term
| explain the relationship of collateral as it pertains to credit |
|
Definition
| what the lender gets if the borrower fails to pay |
|
|
Term
| what is the calculation for computing gross profit |
|
Definition
|
|
Term
|
Definition
| need to be included in the financial statement though there are no rules clarifying the specificity of them. Used to keep statements from being misleading and to report any occurences that have appened betweent he time of the statement and its release |
|
|
Term
| if an asset is said to be "liquid" what must it be |
|
Definition
| able to be quickly sold in a readily availble market at the intended price (no significant loss) |
|
|
Term
| what is a classified balance sheet |
|
Definition
| current and long term assets and liabilities are segregated |
|
|
