Accounting - Chapter 18
Terms in this set (18)
A long-term promise to pay a specified amount on a specified date and to pay interest at stated intervals.
All bonds representing the total amount of a loan.
Purchases of plant assets used in the operation of a business.
Assets pledged to a creditor to guarantee repayment of a loan.
Cost of capital
The ratio of interest and dividend payments to the proceeds from debt and capital financing.
See line of credit.
Obtaining capital by borrowing money for a period of time.
The ability of a business use borrowed funds to increase its earnings.
Interest accrued on borrowed funds.
The date on which a business issues a note, bond, or stock.
Line of credit
A bank loan agreement that provides immediate short-term access to cash.
Expenses that are not related to a business' normal operations.
A class of stock that gives preferred shareholders preference over common shareholders in dividends along with other rights.
Prime interest rate
The interest rate charged to a bank's most credit-worthy customers.
The payment of an operating expense necessary to earn revenue.
Stated interest rate
The interest rate used to calculate periodic interest payments on a bond.
Obtaining capitial by issuing stock in a corporation.
A value assigned to a share of stock.
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