Term
| Creditors Have a ____ on the assets of a company? Equity investers only have a ____? |
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Definition
Creditors have a Strong Claim. They can sue and their amounts due are paid first.
Equity investers have a Residual Claim. |
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Term
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Definition
| Total Assets = total of liabilities + equity. |
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Term
| Money-Measurement Concept |
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Definition
| Accounting reports only those facts that can be stated in monetary amounts. |
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Term
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Definition
| Business accounts are kept for entities, rather than for persons who own or operate those entities. |
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Term
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Definition
| Accounting assumes that an entity will continue to operate indefinately. |
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Term
| Asset-Measurement Concept |
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Definition
| Monetary assets are reported at their fair value; other assets are reported at a number based on cost. |
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Term
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Definition
| Cash and other assets that are expected to be converted into cash or used up in the near future, usually with 1 year. |
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Term
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Definition
| Obligations due in the near future, usually within 1 year. |
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Term
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Definition
The ratio of current assets to current liabilities.
assets/liabilities = current ratio |
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Term
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Definition
| Money put into an entity by shareholders in the form of common stock. |
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