34 terms

accounting final multiply questions

promissory notes that require the issuer to make a series of payments consisting of both interest and principal
Installments notes
if an issuer sells a bond at a date other than an interest payment date
the buyers normally pay the issuer the purchase price plus any interest accrued since the prior interest payment date
which of the following statements is true
interest on bonds is tax deductible
a bondholder that owns a $1000, 10%, 10-year bond has
the right to receive 1000 at maturity
bonds that have an option exercisable by the issuer to retire them at stated dollar amount prior to maturity are known as
callable bonds
a bond traded at 102 1/2 means that
the bond traded at $1025 per $1000 bond
when bond sells at a premium
the stated (or coupon) rate is above the market rate
a bond sells at a discount when the
the stated (or coupon) rate is below the market rate
amortizing a bond discount
allocates a part of the total discount to each interest period
the discount on bonds payable account is
a contra liability
a discount on bands payable
occurs when a company issues bonds with a stated (coupon) rate less than the market rate
preemptive right
the right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional proportionate shares of common stock issued by the corporation is called a
the total amount of stock that a corporation's charter allows it to issue is referred to as
authorized stock
par value of a stock refers to the
value assigned to a share of stock by the corporate charter
stockholders' equity consists of
contributed capital and retained earnings
owners of preferred stock often do not have
voting rights
a company issues 7%preferred stock with $100 par value. its current market price is $150. this means that
the amount of the dividend is $7 per year per preferred share
retained earnings
generally consists of a company's cumulative net income less any net losses and dividends declared since its inception
the amount of income earned per share of a company's common stock is known as
earnings per share
the annual amount of cash dividends distributed to common shareholders relative to the common stock's market value is the
dividend yield
book value per share
reflects the value per share if a compnay is luquidated at balance sheet amounts
a corporation's distribution of additional shares of its own stock to its stockholders without the receipt of any payment in return is called
stock dividend
the ability to meet short term obligations and to efficiently generate revenues is called
liquidity and efficiency
industry standards for financial statement analysis
are set by the financial performance and condition of the company's industry
the comparison of a company's financial condition's and performance across time is known as
horizontal analysis
the measurement of key relations among financial statement items is known as
ratio analysis
the comparison of a company's financial condition and performance to a base amount is known as
vertical analysis
comparative financial statements in which each amount is expressed as a percentage of a base amount are called
common-size comparative statements
currents assets divided by current liabilities is the
current ratio
quick assets divided by current liabilities is the
acid-test ratio
net sales divided by average accounts receivable is the
accounts receivable turnover ratio
dividing accounts receivable by net sales and multiplying the result by 365 is the
days' sale uncollected
dividing ending inventory by cost of goods sold and multiplying the results by 365
days' sales in inventory
net sales divided by average total assets is the
total asset turnover