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mgmt 200 final exam

Terms in this set (32)

accounting equation
resources of the company equal creditors' and owners' claims to those resources
outstanding common stock
stock in the hands of stockholders
serial bond
matures in installments
stated<market
discount
stated >market
premium
price of a bond=
PV of the face amount + FV of the stated interest payments
authorized common stock
shares that can be issued
accrual-basis accounting
when the job is done
cash-basis accounting
when the customer paid cash
indirect method
-begins with net income
direct method
-considers each of the individual accounts that make up the net income
GAAP
Generally accepted accounting principles
income statement
expenses & revenues
operating
expenses & revenues (paid with cash)
-dividends received
-payables & receivables
financing
bonds & stock (paid with cash)
-long term liabilities & stock
-dividends paid
investing
purchase of equipment or land
-long term investments
non-cash activity
note payable : when not paid with cash
preferred stock
-takes priority over common stock dividends
-entitles the holder to a fixed dividend
-can have features of both liabilities & stockholders' equity
term bond
bonds that mature all at once
cash interest payment
face amount x stated interest rate
paid in capital
amount stockholders have invested in the company
# shares outstanding=
# shares issued - # shares bought back
solvency
the company's ability to pay its long-term liabilities
liquidity
company's ability to pay its current liabilities
stated interest rate
doesnt change over time
cummulative
pay for the previous year and this year
non cummulative
only pay for one year
outstanding common stock=
issued - treasury stock
what piece of legislation was passed in response to corporate accounting scandals by Enron, WorldCom, and others?
Sarbanes-Oxley Act
stated rate
the rate quoted in the bond contract used to calculate the cash payments for interest
indirect & direct
two allowable methods to present operating activities in the statement of cash flows
bonds
very liquid
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