Term
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Definition
| how much stock a company can legally sell |
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Term
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Definition
| how much stock is actually sold by a company |
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Term
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Definition
| different from issued because a company can buy back some stocks called treasury stock (used to find dividends and earnings per share) |
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Term
| journal entry for sold bonds |
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Definition
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Term
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Definition
day the board decided to pay the dividends, so there is a legal obligation - MUST BE BOOKED
DR retained earnings
CR dividend payable |
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Term
| declaration date journal entry |
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Definition
DR retained earnings
CR dividend payable |
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Term
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Definition
day to figure out which shareholders get it
NO ACCOUNTING TO BE DONE |
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Term
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Definition
DR dividends payable
CR cash |
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Term
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Definition
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Term
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Definition
20-25% of outstanding shares
done at par value |
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Term
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Definition
less than 20% of outstanding share
done at market value |
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Term
| payment of liabilities and stockholders (order) |
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Definition
1. liabilities
2. preferred stockholders
3. common stockholders |
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Term
| straight preferred stock vs. cumulative preferred stock |
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Definition
| cumulative adds up each year |
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Term
| how do you figure out the number at the bottom of your cash flow statement? |
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Definition
| cash account at beginning of the year - cash account at end of the year |
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Term
| direct vs. indirect method |
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Definition
| 99% of the companies use indirect method |
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Term
| revenue recognition principle |
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Definition
| record revenue when it is earned -> look to see if services have been rendered or products delivered, price is fixed or determinable, or that payment is confirmed |
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Term
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Definition
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Term
| book accounts receivable (bad debt expense) |
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Definition
DR accounts receivable
CR sales
at year end if you haven't collected all of the AR:
revenues - bad debt expense (on income statement)
allowance for bad debts is the contra account for your accounts receivable (credit balance) |
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Term
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Definition
income statement method
balance sheet method |
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Term
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Definition
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Term
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Definition
extra step in this method
aging |
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Term
| net realizable bad debts equation |
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Definition
| = gross accounts receivable - allowance for bad debts |
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Term
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Definition
= cogs/ average inventory
(if you divide by 365 you will get the number of day you turned over your inventory in a year) |
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Term
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Definition
| = Beginning inventory + purchases - sales |
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Term
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Definition
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Term
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Definition
| cost equipment, transportation, legal fees, sales taxes |
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Term
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Definition
| putting all these costs into the price (cost of equipment, transportation, legal fees, sales taxes) |
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Term
| interest expense does not go into x unless you are y |
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Definition
x= asset acquired
y= expense |
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Term
| expense matching principle |
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Definition
period of time in which it is generating revenue
need to know:
-cost of what you are talking about
-estimated life
-estimated residual value
three methods:
-straight line
-units of production
-double declining balance |
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Term
| straight line method (equation) |
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Definition
| = cost - residual / useful life |
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Term
| double declining balance method (steps) |
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Definition
| do not take out residual life, take balance of the asset, multiply it by the double declining balance |
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Term
| current liabilities need to be settled within... |
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Definition
| ...the next operating cycle (1 yr) |
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Term
| current ratio (in dollars) |
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Definition
| = current assets - current liabilities (in dollars) |
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Term
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Definition
| = current assets / current liabilities |
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Term
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Definition
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Term
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Definition
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Term
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Definition
if it is probable AND subject to estimate - record as liability
if it is probable AND not subject to estimate - disclose in note
if it is reasonably possible - always disclose in note
if it is remote - never disclose |
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Term
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Definition
can be like a purchase:
-if it says lease term is 75% or more of the asset's expected economic life
-ownership of the asset is transferred to the lessee at the end of the lease
-lease permits lessee to purchase the asset at a price that is lower than its fair market value
-the present value of the lease payments is 90% or more of the fair market value of the asset when the lease is signed |
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