Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Accounting 2 > Exam 1 (Ch 13, 16, 17) > Flashcards

Exam 1 (Ch 13, 16, 17) Flashcards

1
Q

Defn: An amount assigned by a company to a share of its stock.

A

Par Value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Defn: The date the corporation records the stockholders that receive dividend checks. -Those stockholders holding the stok at the end of the business day on that date will receive a dividend

A

Date of record

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

The ability of a company to pay its currently maturing debts is known as its ________. Also its the measure of a company’s ability to convert assets into cash.

A

Liquidity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Ability of a company to pay its debts into the long term (greater than 12 months)

A

Solvency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Formula: Times-interest-earned ratio

A

Times-interest-earned ratio = Net income + Income tax expense + Interest expense

Interest expense

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the rule of thumb for credits (CR) on a balance sheet that represent an increase to cash for the Statement of Cash Flows and vice versa for a debit (DR). (3 accounts types)

A
  1. Asset account other than cash 2. Liability account 3. Owner’s Equity account
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Defn: A corporation’s own stock that it has previously issued and then later reacquired.

A

Treasury stock

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Defn: The comparison of a company from one year to the next by studying percentage changes of comparative financial statements

A

Horizontal analysis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The ability of a company to earn a profit is a measure of ____________.

A

Profitability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Defn: Reports on a business’s cash receipts and cash payments for a specific period.

A

Statement of Cash Flows

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Defn: Activities that increase or decrease long-term assets

A

Investing activites

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Defn: A corporation’s equity that includes paid-in captial and retained earnings.

A

Stockholder’s Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Defn: The amount above par at which a stock is issued.

A

Premium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the (4) basic rights of the stockholder?

A
  1. Voting 2. Dividends 3. Liquidation 4. Preemptive right
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

True/False Preferred stockholders often retain the right to vote.

A

False. Most often preferred stockholders choose to give up that right for their preferred status.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What are (3) dates regarding dividends:

A
  1. Declaration date 2. Date of record 3. Payment date
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Defn: Distribution of a corporation’s earnings to stockholders.

A

Dividend

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Formula: Price/Earnings Ratio (P.E.)

A

P.E. = Market Price per Share of Cmn Stk

Earnings per Share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Defn: The price the stock initially sells for the first time it is sold.

A

Issue price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Defn: Stack that has been issued but may or may not be held by stockholders

A

Issued stock

21
Q

Defn: Activities that increase or decrease long-term liabilities and equity

A

Financing activites

22
Q

When classifying items on the Statement of Cash Flows and the account affected is a Current Asset or Current Liability then it is an __________ Activity.

A

Operating activity

23
Q

Defn: Stock that gives its owners certain advantages over common stockholders, such as the right to receive dividends or assets (if the company liquidates) before common stockholders.

A

Preferred stock

24
Q

Defn: Preferred stock whose owners must receive all dividends in arrears plus the current year dividend before the corporation pays dividends to common stockholders.

A

Cumulative preferred stock

25
Q

Defn: Dividends on preferred stock that is cumulative that has not been paid for the year.

A

Dividend in Arrears

26
Q

Defn: Activities that creat revenue or expense in the entity’s business.

A

Operating activities

27
Q

When classifying items on the Statement of Cash Flows, if the account affected is a Non-Current Asset account then it is what kind of activity?

A

Investing activity

28
Q

Defn: The date that payment is issued of dividends owed to stockholders

A

Payment date

29
Q

What are characteristics of a corporation (7):

A
  1. Separate legal entity 2. Number of owners 3. No personal liability for owners 4. Lack of mutual agency 5. Indefinite life 6. Taxation 7. Capital accumulation
30
Q

What are the (3) basic types of cash flow activities:

A
  1. Operating activities 2. Investing activities 3. Financing activities
31
Q

Defn: Preferred stock whose owners do not receive passed dividends.

A

Noncumulative preferred stock

32
Q

Defn: Issued stock in the hands of the stockholders.

A

Outstanding stock

33
Q

Formula: Rate of Return on Common Stockholders’ Equity

A

Rate Rtn on Cmn Stkhdr Equity = (Net Income - Preferred Dividends)

Avg Cmn Stockholders’ Equity

34
Q

Defn: The day the board of directors of a company announces the intention to pay dividends to stockholders - declaration of a cash dividend creates a liability (or obligation) for the corporation

A

Declaration date

35
Q

Defn: Represents the basic ownership of a corporation

A

Common stock

36
Q

Defn: Represents amounts received from stockholders in excess of par value.

A

Paid-in Capital in Excess of Par

37
Q

Defn: The maximum number of shares of stock that the corporate charter allows the corporation to issue.

A

Authorized stock

38
Q

Defn: A firm that handles the issuance of a company’s stock to the public.

A

Underwriter

39
Q

When classifying items on the Statement of Cash Flows, if the account affected is a Non-Current Liability or any Owner’s Equity Account then it is an __________ activity.

A

Financing activity

40
Q

Formula: Current Ratio

A

Currient Ratio = Total Current Assets

Total Current Liabilities

41
Q

Defn: Comparing a company with other companies based on percentages computed from elements of its financial statements

An analysis of a financial statement that reveals the relationship of each statement item to its base amount.

A

Vertical analysis

42
Q

Defn: Equity earned by profitable operations of a corporation that is not distributed back to stockholders.

A

Retained Earnings

43
Q

Formula: Debt Ratio

A

Debt Ratio = Total liabilities

Total assets

44
Q

Defn: Stockholder’s right to maintain their proportionate ownership in the corporation

A

Preemptive Right

45
Q

Defn: Represents amounts received from the stockholders of a corporation in exchange for stock.

A

Paid-in Capital

46
Q

Formula: Inventory Turnover Ratio

A

Inventory Turnover Ratio = Cost of Goods Sold

Avg Merchandise Inventory

47
Q

Formula: Earnings Per Share (EPS)

A

EPS = (Net income - Preferred dividends)

Average common stockholders’ equity

48
Q

Defn: A business organized under state law that is a separate legal entity.

A

Corporation

Accounting 2 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions