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Accounting 201 > Final Exam > Flashcards

Final Exam Flashcards

1
Q

What’s the entry for issuing a note payable

A

Debit: cash
Credit: Note payable

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2
Q

What’s the adjusting entry for interest

A

Debit: interest expense
Credit: interest payable

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3
Q

What’s the equation to find interest

A

Amount x Rate x Time

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4
Q

How do you record the note and interest being payed

A

Debit: Notes payable and interest payable
Credit: cash

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5
Q

How do you record sales tax in relation to your sales

A

Debit: Cash
Credit: sales revenue and sales tax payable

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6
Q

How do you record unearned revenue and then how do you record when it’s earned

A

Debit: cash
Credit: unearned rev

Debit: unearned rev
Credit: revenue

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7
Q

How do you record payroll and then the actual payment of payroll

A

Debit: salaries and wages expense
Credit: ant and all taxes payable

Debit: salaries and wages payable
Credit: Cash

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8
Q

How do you record bonds issued at discount

A

Debit cash and discount on bonds payable

Credit: bonds payable

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9
Q

How do you record bonds issued at premium

A

Debit: Cash
Credit: bonds payable and premium on bonds payable

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10
Q

What’s the entry for redeeming a bond

A

Debit: Bond payable
Credit: cash

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11
Q

What are the 4 types of bonds

A

Secured: assets are pledged as collateral
Unsecured: issued against the credit if the borrower
Convertible: can be converted into CS
Callable: can be called back

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12
Q

What’s the entry to issue a bond

A

Debit cash

Credit bonds payable

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13
Q

What is liquidity

A

Measured the short term ability of a company to pay its obligations and meet its unexpected needs for cash

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14
Q

Debt to asset ratio

A

Total liabilities/ total asset

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15
Q

Times interest earned

A

Net income+interest expense+income tax expense / interest expense

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16
Q

What are the pros and cons to being a corporation

A

Pros: separate legal existence, limited liability of stockholders, shareholders may sell their stock, can acquire capital, continuous life, corporate management

Cons: government regulations, additional taxes

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17
Q

What is the entry for issuing common stock

A

Debit: cash
Credit: common stock

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18
Q

What is always credited in the issuance of common stock or preferred stock?

A

Common stock or preferred stock and PIC in excess of par value (if applicable)

19
Q

If you purchase treasury stock what’s the JE

A

Debit: TS
Credit: Cash

20
Q

Equation to find outstanding stock

A

Issued stock - Treasury Stock

21
Q

What are the three relevant dates for dividends

A

Declaration, record, and payment

22
Q

What dividends require entries and if they do what are they

A

Declaration:
Debit: cash dividends
Credit: dividends payable

Record date: no entry

Payment date:
Debit: dividends payable
Credit: cash

23
Q

What are the results of stock dividends

A

Decrease in retained earnings and increase in paid in capital

24
Q

Payout ratio

A

Cash dividends declared on common stock / net income

Higher number better

25
Q

Return on common stockholders equity

A

Net income- preferred dividends / avg. common stock holders equity

26
Q

Operating activities include

A

Sale of goods or services
Interest received and dividends received
All income statement items

27
Q

Investing activities include

A

Sale of ppe
Sale of investments
Collection of loans

28
Q

Financing activities include

A

Sale of CS

Issuance of bonds and notes

29
Q

How are current assets and current liabilities added back or taken out of operating activities

A

Increase in CA is subtracted
Decrease in CA is Added

Increase in CL is added
Decrease in CL is subtracted

30
Q

Free cash flow

A

Net cash provided by operating activities - capital expenditures - cash dividends

31
Q

In terms of the corporate life cycle what’s does financing do as a company goes from introductory, growth, maturity and decline.

A

Financing is highest during introductory and slowly decline throughout

32
Q

In terms of the corporate life cycle what’s does operating do as a company goes from introductory, growth, maturity and decline.

A

Lowest during introductory and peaks at maturity then declines during decline

33
Q

In terms of the corporate life cycle what’s does investing do as a company goes from introductory, growth, maturity and decline.

A

Lowest during introductory
Peaks at maturity
Declines at decline

34
Q

What is included in the operating activists section

A 
Net income
Depreciation
Disposal on PA
AR
INV
Prepaid exp.
AP
Accrued expenses
35
Q

What is included in the investing activists section

A

Purchase of investments
Purchase or sale of PA
Disposal of PA

36
Q

What is included in the financing activists section

A

Redemption of bonds
Issued stock
Payment of cash dividend

37
Q

What effect do dividends have on the composition of SE,total SE, par or stated value, and number of shares outstanding

A

Changes composition of SE
Total SE remains the same
No effect on the par or stated value
Increases the number of shares outstanding

38
Q

Total paid in capital

A

Stock dividend: increase

Stock split: no change

39
Q

Total RE

A

Stock dividend: decrease

Stock split: no change

40
Q

Total par value

A

Stock dividend: increase

Stock split: no change

41
Q

Par value per share

A

Stock dividend: no change

Stock split: decrease

42
Q

Shares outstanding

A

Stock dividend: increase

Stock split: increase

43
Q

What are the signs for amortization of a discount

A

+ - -

44
Q

What are the signs for amortization of a premium

A
    • +

Accounting 201 (3 decks)

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