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Intermediate Accounting 1 (TEST_2) UL
Intermediate Accounting 1 (TEST_2) UL, Dr Ward
175
Accounting
Undergraduate 3
09/27/2014

Additional Accounting Flashcards

 


 

Cards

Term

C4LO1

 

What are the three usefulnesses of the IS?

Definition
  1. Evaluate the past performance of the company.
  2. Provide a basis for predicting future performances.
  3. Help assess the risk or uncertainty of achieving future cash flows. 
Term

C3LO1

 

What are the limitations of the IS?

Definition
  1. The stmt does include many items that contribute to general growth and well-being of a company
  2. Income numbers are often affected by the accounting methods used.
  3. Income measures are subject to estimates. 
Term
The transaction approach focuses on the...
Definition
activities that accurred during a given period. From presenting just net change to > disclosing components of the change.
Term
What are the 7 sections of the IS?
Definition
  1. Operating Sections
  2. Nonoperting sections
  3. Income tax
  4. Discontinued operations
  5. Extraordinary items
  6. Non controlling interest
  7. Earnings per share
Term
What are the usual four sections of the Operating section of the IS?
Definition
  1. Sales and Rev
  2. COGS
  3. Selling Expenses
  4. Administrative or General Expenses
Term
What two things do the "Nonoperating Section" consist of ?
Definition
  1. Other revenues and Gains
  2. Other Expenses and Losses
Term
How do you find Gross Profit?
Definition
(Sales) - (Discounts,Returns) - (COGS)
Term
How do you find "Income from operations"?
Definition
(Gross Profit) - (Selling & Administrative Expenses)
Term
How do you find "Income before income tax"?
Definition
Income from operations + Other Rev & Gains - Other Expenses and Losses
Term
How do you find "Net Income" ? (Multi-step IS)
Definition
Income before taxes - income taxes = Net Income
Term
Gains
Definition
Increase in equity (net assets) from peripheral or incidental transactions; reported net.
Term
Losses
Definition
Decrease in equity (net assets) from peripheral or incidental transactions; reported net
Term
Name three examples of gains/losses:
Definition
  • Sale of investments or plant assets
  • Settlements of liabilities
  • Write-offs of assets 
Term
Single step IS consists of two groupings:
Definition
Rev - Expenses = Net inc
Term
Is there a distinction b/t operating and nonoperating in the single step IS?
Definition

no

 

Only in multi-step IS

Term
Is income tax shown within the expense section?
Definition

NO.

 

Income tax is shown on a separate line - not as part of expenses - "ALWAYS SUBTRACTS" 

Term
The multi-step IS separates _______transactions from ________ transactions
Definition
operating, nonoperating
Term
The multi-step IS matches ___ and ____ with related revenues
Definition
costs and expenses
Term
The multi-step IS highlights ..
Definition
  • Certain components of inc that analysts use to assess financial performance.
  • Important relationships
Term
What is involved in the "operating section" of the IS?
Definition
  1. Sales
  2. COGS
  3. Operating Exp (Selling & Admin)
Term
What is involved in the "non-operating" section of the IS?
Definition
Other rev & other exp
Term
What sections are below the "operating section"?
Definition
  1. Income tax
  2. Discontinued operations
  3. Extraordinary items
  4. Noncontrolling interest
  5. Earnings per share
Term
What is characteristics of the "Condensed IS"?
Definition
  • No details presented; only category totals
  • Supplemental schedules support totals
  • Highly summarized
Term
Structure of the Condensed IS?
Definition
  1. Net sales-COGS=Gross profit
  2. Less Selling & Admin expenses = Inc from operations
  3. Other rev and gains
  4. Other expenses and losses
  5. = Inc b/f taxes
  6. Income taxes
  7. =Net inc of the year
  8. Earning per share 
Term
Income before income taxes - Income tax expense =
Definition
Income from continuing operations
Term
Income from continueing operations +/- Discontinued operations =
Definition
Income before Extraordinary items
Term
Income b/f Extraordinary items +/- Extraordinary items =
Definition
Net income
Term
Net income - Noncontrolling interest =
Definition
Income attributable to majority owner
Term

Discontinued Operations

Definition
A segment of a company's business that has been sold, disposed of or abandoned. Discontinued operations can range from a certain product line to an entire line of business. When operations are discontinued, this is reported on the company's income statementas separate from income from continued operations.
Term
Extraordinary items
Definition
 an event or transaction that is considered abnormal, not related to ordinary company activities, and unlikely to recur in the foreseeable future.
Term
Examples of an extraordinary item:
Definition

 destruction of facilities by an earthquake, or the destruction of a vineyard by a hailstorm in a region where hailstorm damage is rare.


VERY RARE

Term
Intraperiod Tax Allocation
Definition

 " The allocation of tax within a period. "

 

For example, extraordinary items must be reported after income tax on the income statement, while operating revenues are reported before income tax. 

Term
Intraperiod tax allocation helps users under the impact on _______ on the various components of __________
Definition
Income taxes, Net income
Term

Intraperiod tax allocation on the income statement is 

used for:

Definition

(1) income from continuing operations, 

(2) discontinued operations, and

(3) extraordinary items. 

Term
Is unusual items listed above or below "income from operations"?
Definition
Above - in the "other expenses and gains " or "other expenses and losses" ?
Term
Is discontinued operations listed above or below the "income from operations"?
Definition
Below -
Term
How do you calculate COGS under a periodic inventory system?
Definition

Begin Inventory

ADD: Purchases

Less: Purchase Returns and Allow

Less: Discounts

ADD: Freight in 

= Goods Available for sale

Less: Ending Inventory

= COGS

Term
Taxes are always added or subtracted from the IS?
Definition
subtracted
Term

What is the difference b/t "PreTax" and "Net of Tax"?

 

Definition

PreTax - Before taxes are taken out, therefore taxes will need to be taken out. 

 

Net of tax - taxes has already been taken out. 

Term
What items on the IS (when calculating EPS) do you subtract the prefered common stock?
Definition

 

 

Operations income

Net Income

 

All "net of tax" items except extraordinary items or unusual items. 

Term
According to GAAP, EPS must be reported for...
Definition

All "net of tax" totals:

 

IBEI

Ext(Loss/gain)

NI 

 

SEPARATELY 

 

Term
Everything before "Income tax Expense" is (Pretax/Net of tax) and everything after it is (Pretax/Net of tax)
Definition

Before = PreTax

After = Net of Tax

Term

Note* Remember to put parathesis around any subtractions*

 

 

Definition
Term
If you are asked to calculate "Total Tax", what items should you look for?
Definition

Income taxes (under IBIT)

Taxes from ExtroItems

 

 

-Any taxes paid (remember tax savings from losses)

Term

Note* Don't look over detail..

 

You got a question wrong concerning the Revenue recongnition with words "Cost of" that you didn't see.. which changed the definition .

Definition
Term

Note* 


Don't overlook detail concerning headings. 

 

Look for if you are doing year end statements.

 

Ex. For the Year Ended December 31, 2014

 

Just adjusting entires

 

Ex. Jan, 31 2014

Definition
Term
What is another word for temporary accounts (i.e IS accounts)?
Definition

Nominal.

 

Ex: 

 

Revenues

Expenes

Gains

Losses 

Term

What detail in ACC named such as 

 

"Prepaid Insurance Expense"

Definition

This would go on the BS because it has Prepaid...

 

The word prepaid is superior to "Expense"

Term

**Note

 

Pay close attention to dates for enties and adjustments...

 

Not seeing dates can change numbers. 

Definition
Term
What about presentment of taxes in the IS is required by GAAP
Definition

Intraperiod Tax Allocation (Required to show EPS for all "net of tax" category totals. 

 

- Allocation of tax within a period. 

i.e. Must show taxes for usual sales and extraordinary items in separate sections. 

 

DEF - An intraperiod tax allocation is the allocation of income taxes to different parts of the results appearing in the income statement of a business, so that some line items are stated net of tax.

Term
When computing EPS, what is irrelavant concerning stock?
Definition

 - Common stock dividends - 

 

You only need the total shares of common stock for the denominator. 

Term
If  communalitive preferred stock is not paid during a period, it turns into what...
Definition

Stock in arrears 

 

DEF = the omitted dividends on cumulative preferred stock.

Term

NONCUMULATIVE preferred stock

Definition
A type of preferred stock that does not pay the holder any unpaid or omitted dividends. If the corporation chooses to not pay dividends in a given year, the investor does not have the right to claim any of those forgone dividends in the future.
Term

INFO** 

 

In the case that preferred shares are cumulative, holders are entitled to any missed or omitted dividends. For example, let's assume that ABC Company chooses to not pay its $1.10 annual dividend to its cumulative preferred stockholders.

Definition
Term
All inclusive operating concept
Definition
Following the all-inclusive income concept, all items, including extraordinary and nonrecurring gains and losses, are incorporated into the income statement. Since all gains and losses are reported on the income statement, this type of income reporting results in what is sometimes referred to as comprehensive income.
Term
Is unusual gains and losses reported with the other gains and losses?
Definition
No, it is reported on a separate line.
Term
What are the four general categories of unusual and irregular items?
Definition
  1. Unusual gains and losses
  2. Discontined operations
  3. Extraordinary items
  4. Noncontrolling items
Term
Which items may need separate disclosure on the IS?
Definition
  1. Losses on the write-down or write-off of assets
  2. Gains or lossess from exchange or translation of oreign currencies
  3. Restructuring charges
  4. Other gains and losses from sale or abandonment of property, plant, or equipment used the business. 
  5. Effects of a strike
  6. Adjustment of accruals on long-term contracts. 
Term
Where is "Discontinued Operations" located on the IS?
Definition
After the "income from continuing operations"
Term

Jo has Inc b/f inc tax of 250,000 > gain of 100K from discont op. 30% tax > 

 

Do a small IS.

Definition

IBIT - 250k

Income tax (.3) - 75k

IFCO-175k

Gain on discont op 100k        

        Less: App Inc tax 30k    70k

Net Income 245k

____


Term
What must you put around subtractions or you will get points off?
Definition
parentheses
Term
What is the formula for calculating EPS (earnings per share)? SHE EMPHASIZED!
Definition

Net income - Preferred Dividends / Weighted av # of shares outstanding.

 

*If there is no preferred dividends then you just exclude from formula. *

 

Term
What does EPS measure?
Definition
The dollars earned by each share of common stock.
Term
Does the EPS have to be dislosed?
Definition
YES, it is required by GAAP to be disclosed on face of IS.
Term

Jo has :

  1. NI - 1M
  2. Declared and pays preferred Stk Div 250k
  3. 190k CT outstand

What is the EPS ?

Definition

1M-250K / 190k = 3.95 per share

 

It does not matter wether the perferred DIV are paid, we just need the amount declared. 

Term
EPS is required for all _______totals
Definition

"net of tax"


      a.     Income from continuing operations

              

b.     Discontinued operations.

  1.  

     

                  c.      Income before extraordinary items.

     

                  d.     Extraordinary items.

     

                  e.     Net income.

     
Term
Will you ever do EPS on Pretax totals?
Definition
NO
Term
State difference b/t communilative Pref Stock and noncommunilative Pref Stock. (SHE EMPHASIZED)
Definition

Non-communilative  - A type of preferred stock that does not pay the holder any unpaid or omitted dividends. If the corporation chooses to not pay dividends in a given year, the investor does not have the right to claim any of those forgone dividends in the future.

 

 CommunilativeA type of preferred stock with a provision that stipulates that if any dividends have been omitted in the past, they must be paid out to preferred shareholders first, before common shareholders can receive dividends.

Term
If the  Communilative preferred stock has not been paid then it is _________
Definition
Stock in Arrears
Term
Current operating performance approach ?
Definition
Urge that the most useful income measure reflects only regular and recurring revenue and expense elements.
Term
Modified all-inclusive concept ?
Definition

Companies record most items, including unusual and irregular ones, as part of net income. 

 

These income items are in four categories:

  1. Unusual gains and losses
  2. Discontinued operations
  3. Extraordinary items
  4. Noncontrolling interest. 
Term
Definition of Unusual gains and losses?
Definition

Pretax - Material items are unusual and infrequent, but not both, should be reported in a separate section just above "income from continuing operations before income taxes". 

 

Note- *Net-of-tax treatment for these items is prohibited.*

Term
Examples of Unusual gains and losses:
Definition
  1. Write-down or write off of assets
  2. exchange or translation of foreign currencies
  3. Restructuring charges (reorganization)
  4. Sale or abandonment of PPE used in Bus.
  5. Adj of accruals on long-term contracts. 
Term
Discontinued Operations occurs when what two things are met?
Definition
  • Company eliminates the results of operations and cash flow of a component AND
  • There is no significant contining involvement in that component after the disposal. 
Term
Component DEF (SHE EMPHASIZED)
Definition

A component is the lowest level at which the company can clearly distinguish the operations and cash flows from the rest of the company. 

 

*****Disposal of component = Discont operations******


(EMPHASIZED) She said know!

Term
Is disontinued operations required to disclose on IS?
Definition

YES, it is required by GAAP to disclose the discontinued operations on the IS and NOT apart of continuing activities. It must be disclosed separately on the IS. 

 

Amount reported "net of tax"

Term
What two things are disclosed on the IS concerning discontinued operations?
Definition
  1. Gain/loss from operating the component during the current period.
  2. Gain or loss from disposal of the component. 

Must be disclosed net of tax

 

 

Must be able to clearly identify the continuring and discontining parts of the CO for all years presented. 

Term

Jo disposed of its rest div at pretax loss of 270k

Prio to disposal, the div operate at pretax loss of 450k

30% tax rate

What will be disclosed on the IS?

Definition

Loss from operations, net of 135k tax -  (315k)

Loss on disposal, net of 81k tax - (189k)

Total loss on discont operations (504k)

____

Term
DEF of extraordinary items ?
Definition

Material events and transactions that meet two conditions: 

  1. Unusual in nature
  2. Infrequent in occurence

Both conditions must be met

Term

What is the restated def of extraordinary items?

 

(SHE EMPHASIZED)

Definition
Nonrecurring material items that differ significantly from a company's typical business activities.
Term
When considering if an item is extraordinary, a CO must consider its...
Definition
environment in which it operates
Term
Extraordinary items are reported (Pretax or Net-of-tax)?
Definition
Net of tax
Term
Will there be Extraordinary items in IRFS?
Definition
NO
Term
Do extraordinary items have to be reported saparatly?
Definition
YES, they all must be reported separately and EPS must be calculated from the totals separately
Term

Effects of major natural casualities, if rare in the area..

 

Extraordinary?

Definition
Yes "Rare in area"
Term

Exproproiation (takeover) of property by foreign gov?

 

Extraordinary?

Definition

YES, rarely happens in US. 

 

Ex if so.. Gov may want to put a interstate through your bus..

Term

Write-down of inventories or write-off of recievables?

 

Extraordinary?

Definition
NO
Term
Example of extraordinary item reported.
Definition

IFCO - 55k

Extr loss, net of 231k tax (539k)

Net income 54,461,000

_________

Term
Is extraordinary items reported above or below discontinued operations?
Definition
Below
Term

When a company owns substantial interest (generally > 50%) in another company, GAAP requires....

 

 

AND what is this called?

Definition

Required that the financial statements of both companies be consolidated together into one set of financials. 

 

This is called Noncontrolling interest. 

Term
Example of Noncontrolling interest on IS
Definition

Net income - XXX

Less net inc allocated to minority interest - XX

Net inc allocated to SH of_____ - XXX

Term
Changes in accounting principle is a _________ adjustment.
Definition
retrospective
Term
Three types of Accounting changes:
Definition
  1. Change entity
  2. Change in principle
  3. Change in Estimate
Term
Examples of changes in accouting principles?
Definition
  1. Change from FIFO to average cost
  2. Change from the percentage-of-completion to the completed-contract method. 
Term
Change in estimates are handled ___________
Definition
Prospectively
Term
Are changes in estimates considered errors?
Definition
NO
Term
Examples of changes in estimates?
Definition
  1. Useful lives and salvage values of depreciable assets
  2. Allowance for uncollectible recievables
  3. Inventory obsolecence
Term
Changes in accounting principle
Definition
Includes changes in the method of inventory pricing from FIFO to average-cost, or a change in accounting for construction contracts from percentage-of-complettion to the completed-contract method.
Term
A company recognizes changes in accounting principle in what way?
Definition
Retrospectively
Term
What is retrospective adjustments?
Definition
Such an adjustment recasts the prior years' statements on a basis consistent with the newly adopted principle.
Term

Change in Acc Principle



Illus 4-20(pg180)

 

Adjustment to retained earning looks like ?

Definition

Begin RE - 50k

Cum Effect (net of tax 2400) - 5600

RE ad adjusted 44400

Term
When you get the total difference when showing multiple years while calculating a change in accounting change.. the differnce is called ...
Definition

Pretax Communalative Effect

 

You report it on the RE stmt net of tax

Term
Changes in estimates are handled...
Definition

prospectively

 

Change are NOT carried back to prior years. 

Term
When changing from one GAAP to another you must prove..
Definition
that the new GAAP better reflects net income
Term
What must you do for changes in estimates?
Definition
Begin using new estimates and go forward. You are forbidded to reclass prior periods. Changes in estimates are not errors.
Term
Changes in errors are treated..
Definition
retrospectively - treated as prior period adjustment; restate prior years' income statements to correct for error. (net of tax)
Term
Examples of Correction of errors
Definition
  1. Mathematical mistakes
  2. Mistakes in application of accounting principles
  3. oversight or misuse of facts

Treated as prior period adjustment. Adjusted to the beginning balance of RE

Term
Jo incorrectly overstated his A/R and sales rev by 100k in 2014. In 2015 he made what entry?
Definition

 DR - RE 100,000

          CR -         A/R 100,000

Term
Are changes in estimates a normal, recurring correction, and adjustment?
Definition
Yes
Term
What three items increase RE?
Definition
  1. Net income
  2. Change in accounting principle
  3. Prior period adjustment 
Term
What items decrease RE?
Definition
  1. Net loss
  2. Dividends
  3. Change in accounting principles
  4. Prior period adjustments
Term
What are Appropriated RE?
Definition
It is restrictions of RE that you are disclosing. No cash is being set aside. Simples makes RE unavailble for declaration.
Term
Comprehensive income includes:
Definition
  • All revenues and gains, expenses and losses reported in net income, and
  • All gains and losses that bypass net income but effect SE
Term
Are selling expenses apart of comprehensive income?
Definition
Yes, all IS items
Term
Any non-owner items that bypass the IS are called...
Definition
Other comprehensive income
Term
Other comprehensive income items:
Definition
  1. Unrealized gains and losses on available for sale securities
  2. Translation gains and losses on foreign currency. 
  3. Unrealized gains and losses on certerin hedging transactions
  4. Adjustment related to....(NEED TO GET FROM SOMEONE)
Term
What four statements are required by GAAP?
Definition

IS

BS

Stmt of Cash flows

Compre inc

Term
Do you prepare another IS when doing Compre-ins stmt?
Definition
NO
Term
The "other compre-inc" is closed to..
Definition
Accumulated other comprehensive income
Term

What three things concerning Compre-inc you MUST know!!

(SHE EMPHASIZED)

Definition
  1. What is it?
  2. What is the "other"?
  3. How to report it?
Term
What is the difference in the "One statement" and "Two stmt" approach when preparing the compre-inc stmt?
Definition

One stmt approach you just add an additional line on your IS.

 

Two statement appraoch you turn the page and add NI# and begin your comprehensive inc stmt on a separate page. 

Term
Accumlated other compre-inc - def
Definition
cumulative gain or loss to date resulting from other comprehensive income.
Term
Where is the Accumulated other compre-inc accouting reported?
Definition
Balance sheet in the SE section
Term

Would :

  • Increase in value of CO reputation
  • Unrealized gain on value of patents

effect net income when prepareing the IS?

Definition
NO, those are not reported. Read limitations of the IS.
Term
The BS  reports ____,_____, and _____ on a specfic date.
Definition

Assets

Liabilities

Equity

Term
Give example of a BS heading.
Definition
March 31, 2014 of As of March 31, 2014
Term
Usefulness of the BS:
Definition
  • Computing rates of return
  • Evaluating the capital structure
  • Assess risk and future cash flows
  • Analyze the company's:
    • Liquidity
    • Solvency
    • Financial flexibility
Term
Limitations of the BS:
Definition
  • Most assets and liabilities are reported at historical cost
  • Use of judgements and estimates
  • Many items of fincial value are omited. 
Term
What are the three general classification:
Definition
  • Assets
  • Liabilities
  • OE
Term

What are all the usual asset accounts and in what order?

 

KNOW ORDER - MEMORIZE

Definition
  1. Current assets
  2. Long-term investments
  3. PPE
  4. Intangible assets
  5. Other assets

Presented in order of liquidity 

Term
Current asset definition (KNOW) -
Definition
Cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer; listed in order of liquidity .
Term
List current asset items and in order (KNOW)
Definition
  1. Cash and cash equivalents
  2. Short-term investments
  3. Recievables
  4. Inventories
  5. Prepaid expenses
Term

Cash


  1. Generally any monies...
  2. Cash equivalents def
  3. What must be disclosed ?
Definition
  1. Availiable "on demand"
  2. Short-term highly liquid invesments that mature within three months or less. 
  3. Restrictions or commitmets must be disclosed. 
Term
Short term investments
Definition
Must be marketable & managment must intend to convert within one year or operating cycle.
Term
Trading securities are always..
Definition
Current assets
Term
What are the two types of recievables?
Definition

A/R

N/R

Term
A/R is always ____(current or longterm)
Definition
Current
Term
If N/P has no due date, place it as a _____
Definition
current asset
Term
NOTE* Total current asset line is required by GAAP
Definition
Term
Long term investments
Definition
Long term commitment of funds in order to earn a profit, but not from main operations
Term
Long term investments generally consists of four types:
Definition
  1. Securities
  2. Tangible fixed assets
  3. Special funds
  4. Non-consolizated subsidiaries.
Term
Security examples
Definition
  1. Bonds
  2. CS
  3. longterm notes
Term
Tangible fixed asset example:
Definition

Not currently used in operations

(Land held for speculation)

Term
Examples of special funds:
Definition
  1. Sinking funds
  2. pension funds
  3. plant expansion fund
Term

Long term investment

 

examples of securites: 

Definition
  • Bonds
  • Stock
  • Long-term notes
Term

Long term investment

 

Examples of Fixed Assets:

Definition
  • Land held for future plant sites
  • Retired machine no longer in use
Term

Long term investment

 

Examples of special funds (long term restricted cash)

Definition
  • Sinking fund
  • Pensions
  • Cash surrender value of life ins.
Term

Long term investment

 

Examples of "Nonconsolidated Subsidiaries or Affiliated Companies

Definition
  • Investment in Uncon. Sub. 
Term

Concerning Unconsolidated Subsidiaries or Affiliated Companies -

 

<20% is called

Definition
trading  (confirm)
Term

Concerning Unconsolidated Subsidiaries or Affiliated Companies -

 

>20% - < 50% is called..

Definition
Equity investee (Confirm)
Term

Concerning Unconsolidated Subsidiaries or Affiliated Companies -


>50% is when you..

Definition
When you must consolidate statements
Term
PPE - def
Definition
Tangible long-lived assets used in regular operations of the business
Term
Concerning PPE, what is physical property..
Definition
  • Land
  • Building
  • Machinery
  • furniture
  • tools
  • wasting resources (minerals)
Term
With the exception of ____, a company either depreciates (buildings) or depleties (oil reserves) these assets.
Definition
land
Term
Examples of intangibles
Definition
  1. Goodwill
  2. Patents
  3. Trademarks
Term
Other asset examples
Definition
  • Long-term prepaid expenses
  • Non-current recievables
  • Assets in special funds
  • Property held for sale
  • Restricted sale or securities
Term
Intangibles are subject to _____
Definition
amoritization
Term
Other asset (def)
Definition
This section should include only unusual items sufficiently different from asets in the other categories. (Relatively rare)
Term
Liabilities (def)
Definition
Debts or obligations; amounts owed to others.
Term
Current Liabilities (def) SHE SAID KNOW
Definition

"obligations that a company reasonably expects to liquidate iehter through the use of current assets or the creation of current liabilities."

In general, debts that will be padi or will come due within the next year & will use current assets. 

Term
If a current liability is due within the next year, it must use _________
Definition
current assets
Term
Bonds payable use __________ to pay them back.
Definition
sinking funds
Term
Note** You must have line "total current liabilities"
Definition
Term

Working Capital

 

  • Excess of...
  • Represents....
  • _____buffer available to meet...
  • Current ratio =
Definition
  • Excess of current assets over current liabilities
  • Represents the net amount of a company's relatively liquid resources
  • Current ratio = current assets/current liabilities
Term
Concerning working capital, what is the idea current ratio?
Definition
2:1
Term
Concerning working capital, what current ratio would be too liquid?
Definition

8:1

 

  • Do i have too much cash
  • Recieveables to high (bad debts)
  • Inventory to high (Not selling)

Note* Cash is unproductive. Must be used to produce more revenue. 

Term
Long term Liabilities (def)
Definition
  • Obligations that a company does not reasonably expect to liquidate within the normal operating cycle.
  • All covenants and restrictions must be disclosed
  • Premium/discount shown right below bond account

 

Term
Capital stock
Definition
the par or stated value of the shares issued.
Term
Additional paid-in capital
Definition

the excress of amounts paid in over the par or stated value

 

Term
RE
Definition
The corp. undistributed earnings
Term

Noncontrolling interest (minority interest)

 

Definition
a portionof the equity of subsidiaries not wholly owned by the reporting company.
Term
Realized gains or losses go on the ______
Definition
IS
Term
Unrealized gains or losses go on the ______
Definition
comprehensive income statement
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