Chapter 3

Question 1

Balance Sheet

Answer 1

Summer statement of the firm’s financial position at a given point in time.

Question 2

Current Assets

Answer 2

Short-Term Assets, expected to be converted into cash within 1 year.

Question 3

Current Liabilities

Answer 3

Short-Term liabilities, expected to be paid off within 1 year or less.

Question 4

Long-Term Debt

Answer 4

Debt for which payment is not due in the current year.

Question 5

Paid-In Capital In Excess of Par

Answer 5

The amount of proceeds in excess of the par value received from the original stock.

Question 6

Retained Earnings

Answer 6

The cumulative total of all earnings, net of dividends, that have been retained and reinvested in the firm since its inception.

Question 7

Statement of Stockholders Equity

Answer 7

Shows all equity account transactions that occurred during a given year.

Question 8

Statement of Retained Earnings

Answer 8

Reconciles the net income earned during a given year, with that change in retained earnings between the start and the end of that year.

Question 9

Notes to the Financial Statements

Answer 9

Explanatory notes keyed to relevant accounts in the statements; they provide detailed info on the accounting policies, and transactions underlying entries in the financial statement.

Question 10

Dividend Per Share (DPS)

Answer 10

The dollar amount of cash distributed during the period on behalf of each outstanding share of common stock.