Term
|
Definition
tangible assets used in a company's operations that have a useful life of more than one acct period.
ex. plant and equipment; property, plant and equipment; or fixed assets. |
|
|
Term
|
Definition
| the process of allocating the cost of a plant asset to expense in the acct periods benefiting from its use. |
|
|
Term
| Why do some companies use accelerated depreciation? |
|
Definition
| yields larger depreciation expenses in the early years of an asset's life and less depreciation in later years. |
|
|
Term
| What are land improvements? |
|
Definition
| land has an unlimited life. however, parking lot surfaces, driveways, fences, shrubs, and lighting systems dont. costs of thyese improvements increase the usefulness of the land and are charged to a separate land improvement account. |
|
|
Term
| What are short-term and long-term liabilities? |
|
Definition
short-term liabilities (current liabilities) are obligations due within one year or the companys operating cycle.]
long-term liabilities are a company's obligations not expected to be paid within one year or the company's operating cycle. |
|
|
Term
| What are accounts payable? |
|
Definition
| aka trade accounts payable are amounts owed to suppliers for products or services purchased on credit. |
|
|
Term
| What is unearned revenue? |
|
Definition
| aka deferred revenues are amounts received in advance from customers for future products or services. |
|
|
Term
| What is a contingent liability? |
|
Definition
a potential obligation that depends on a future event arising from a past transaction or event.
ex. pending lawsuit |
|
|
Term
| How would the defendant corporation account for a lawsuit? |
|
Definition
| a potential claim is recorded in the accounts only if payment for damages is probable and the amount can be reasonably estimated. |
|
|
Term
| What is preemptive right? |
|
Definition
| protects stockholders' proportionate interest in the corporation |
|
|
Term
| What do we call the number of shares that a corporations charter allows it to sell? |
|
Definition
|
|
Term
| What is the par value of a stock? |
|
Definition
| an amount assigned per share by the corporation in its charter. |
|
|
Term
|
Definition
| a document that gives a designated agent the right to vote the stock. |
|
|
