General Flashcards
intangible assets
long-term assets with no physical existence such as patents, copyrights, trademarks, and goodwill
current liabilities
short-term claims that are due within a year of date of balance sheet
long-term liabilities
claims that come due more than one year after date of balance sheet
owners’ equity
total amount of investment in company minus any liabilities; also called net worth
current ratio
solvency ratio which measures short-term debt-paying ability; computed as current assets divided by current liabilities
quick ratio
liquidity ratio which measures current short-term liquidity of firm; computed as (current assets - inventory - prepaid expenses) divided by current liabilities
debt/equity ratio
solvency ratio which measures contribution of lenders, suppliers, and creditors versus contribution made by shareholders; computed as total liabilities divided by owners’ equity
capital loss
amount by which net proceeds from resale of an asset fall short of adjusted cost basis, or book value, of the item
undepreciated capital cost
balance of the capital cost left for further depreciation at any given time
terminal loss
difference between the net selling price and the UCC at the time of disposition (assuming there are no other assets remaining in the class after the sale); terminal losses are 100% deductible expenses.
capital gain
amount by which net proceeds from the resale of an asset exceed the adjusted cost basis, or book value, of the item
CCA recapture
when a depreciable asset is sold, any CCA claimed during holding period that does not represent an actual decline in market value of the asset is considered to be taxable income at the time of disposition of the property; recapture of CCA occurs when the amount credited to thh class of a depreciable asset exceeds the UCC
infant
person who is under the age considered by provincial legislation to be an adult
non est factum
Latin phrase meaning “it is not my doing”; contract law defence allowing signing party to escape performance of a contract on the grounds that it is “fundamentally different from what he or she intended to execute or sign”
vicarious liability
where employers are responsible for negligent acts of their employees when those acts are committed in the course of their employment
consideration
right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility undertaken by the other; must be of some value in the eyes of the court, but does not have to be money
stare decisis
doctrine whereby the judge will interpret a statue in the same way as courts have done previously - courts follow former similar decisions; literally, “let the former decision stand”
injunction
remedy for breach of contract that either stops a party from doing something or requires a party to do something (called a mandatory injunction)
void contract
where a contract never existed at law and never had any legal effect
voidable contract
where a legally binding contract exists, but is void once repudiated by a party entitled to do so
unenforceable contract
where a contract exists at law but performance of the parties’ obligations cannot be enforced
conditions
essential terms of a contract, going to the heart or root of the agreement; without these most important terms, the parties would probably not have entered into the agreement.
warranties
terms of lesser importance in contract that do not have vital significance to the parties and will not have directly influenced them to enter into the contract as formulated
liquidity
speed with which an asset can be coverted into cash
currrent assets
assets that can or will be converted to cash within the next 12 months
fixed assets
long-term assets used by a company for more than a year, such as land, buildings, and machinery; also referred to as capital assets or property, plant and equipment
amortization
allocation of an asset’s original cost to the years in which it is expected to produce revenues; also called depreciation
stakeholders
individuals, groups, or organizations to whom a business has responsibility; the stakeholders of an organization include its employees, customers, suppliers, investors, the government, and society as a whole
professional ethics
branch of the science of morals that concerns the daily business conduct of professionals
Bennion’s principal factors of professionalism
academic basis, private practice, advisory function, tradition of service, representative institute, code of conduct
academic basis (Bennion’s principal factors)
every profession involves an intellectual or academic discipline, based on a course of education and tested by examinations; this “implies … professed attainments in special knowledge as distinguished from mere skill”
private practice (Bennion’s principal factors)
daily person-to-person interaction with individual clients and the requirement of acting only in their best interests, with standards beyond that of acting in the public’s interest or those of a corporate employer as a salaried employee
advisory function (Bennion’s principal factors)
a consulting or advisory role, including activities such as negotiating, managing, or coordinating the transaction that is the subject matter of the advice
tradition of service (Bennion’s principal factors)
an outlook that is “essentially objective and disinterested, where the motive of making money is subordinated to serving the client in a manner not inconsistent with the public good”
representative institute
a professional institute is a group of practicing members, all of whom share a common goal of promoting and maintaining an ideal of professional conduct in the interests of the public
