Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
ACG 2021 Block 3 Definitions Block 3 definitions Flash Cards: https://materia.ucf.edu/play/Ogmhc/block-3-definitions Chapter 8 Liability - A present responsibility to sacrifice assets in the future due to a transaction or other event that happened in the past. Current liability – payable within one year Long-term Liability – Payable after one year Accounts payable - Amounts owed for products or services purchased on account Short-term notes payable - used to borrow cash or purchase asset and due within one year Unearned revenue - Business receives cash before services or products are provided to customers. CPLTD Amount of long-term debt principal payable within the next 12 months Sales Tax Payable - sales taxes collected from customers to be remitted periodically to the state and local governments Deferred taxes - Net income and taxable income often differ because of differences in financial accounting and tax accounting rules. Contingent liability - An existing, uncertain situation that might result in a loss. Warranty expense - Based on the matching principle, the company needs to record warranty expense in the same accounting period as the sale. Warranty payable - represents the liability account set up when warranty expense is recognized and is used to account for warranty work performed in the future. Chapter 9 Bond - Formal debt instrument that obligates the borrower to repay a stated amount, referred to as the principal or face amount, at a specified maturity date. Secured Bonds – backed by collateral Unsecured bonds - not backed by collateral Serial bonds – bond issue matures in installments Term bonds – bond issue matures on a single date. 1 Callable Bond - borrower can pay off bond early at a specified call price. Convertible bonds – lender can convert bonds into a specified number of shares of common stock. Stated Rate – (rate on the face of the bond) the rate ‘stated’ in the bond contract Market Rate – (also known as the effective interest rate) true interest rate used by investors to value bond issue. Par Bond Issuance - stated interest rate equals the market interest rate. The bond is issued for face value of bonds. Premium Bond Issuance – stated interest rate exceeds the market interest rate. The bond is issued for more than the face value of bonds. Discount Bond Issuance – stated interest rate is below the market interest rate. The bond is issued for less than the face value of bonds. Bond Carrying Value - The balance in the bonds payable account. The effective interest method for bonds - provides an ‘amortization’ of the discount (or premium) over the term of the bond so that the bond payable account equals face value at maturity. Cash Interest Payment (Credit to Cash account) - Formula for effective interest rate method = Face Value * Stated Interest * Time Period Bond Interest Expense (Debit the expense account) - Formula for effective interest rate method = Carrying Value * Market Interest * Time Period Long-term Debt – debt that matures in over 12 months. Operating Leases: This type of a lease is similar to a rental. Capital Leases: Occurs when a lessee buys an asset and borrows the money through a lease to pay for the asset. Chapter 10 Paid in Capital – Total amount stockholders have invested in the corporation, including common stock, preferred stock, and additional paid in capital. Earned Capital - Amount of earnings the corporation has retained Treasury Stock - Corporation’s stock that is reacquired 2 Common stock – Basic form of stock issued by corporation 4 rights of shareholders - Right to vote; Right to receive dividends; Right to share in distribution of assets; and Preemptive right Preferred Stock - Has advantages over common: Receive dividends first, Receive assets first in liquidation, and Shareholders earn a fixed dividend Par value of stock - Arbitrary amount assigned to share of stock in the articles of incorporation. Retained Earnings - Represents the earnings retained in the corporation – earnings not paid out as dividends to stockholders. Dividends - Distribution to the shareholders of a corporation usually based on earnings 3 dates for issuing dividends – declaration date, date of record, and payment date. Large stock dividend – stock dividend in excess of 25% of the shares outstanding – recorded at par value from retained earning Small Stock dividend - stock dividend of 25% or less of the shares outstanding – recorded at market value. Chapter 11 Indirect Cash Flow Method – begin with net income and then list adjustments to net income, in order to arrive at operating cash flows. Operating activities - Include cash receipts and cash payments for transactions relating to revenue and expense activities (income statement, current assets, and current liabilities) Investing activities - Company makes investments involving the purchase and sale of long-term assets using cash Financing activities - Inflows and outflows of cash resulting from the external financing of a business (Long-term Debt and Stockholders’ Equity) Non-cash activities - transactions that do not impact cash and will typically only involve longterm assets, long-term liabilities, and stockholders’ equity. 3