ACCTG 215 FINAL

Card Set Information

Author:
Anonymous
ID:
2971
Filename:
ACCTG 215 FINAL
Updated:
2009-12-13 15:41:31
Tags:
ACCTG
Folders:

Description:
Review
Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user Anonymous on FreezingBlue Flashcards. What would you like to do?


  1. Define current liability
    A liability a firm expects to satisfy with a current asset (used within one year/period)
  2. When expense is probable and reasonably estimable, but the amount is in a range from X-Y, what do you record?
    The lowest price, or the most probable price.
  3. Current Ratio
    (Current Assets) / (Current Liabilities)
  4. Acid-Test (Quick) Ratio
    (Cash + Short Term Investments + A/R) / Current Liabilities
  5. How do you find the future value?
    FV = PV * FV Factor
  6. How do you find the present value?
    PV = FV * PV Factor
  7. Define annuity
    Any type of annually recurring payment
  8. Define simple interest
    Interest you receive all at once
  9. When a bond is issued, what is the journal entry?
    Issuance:

    • Cash XX
    • Bonds Payable XX
  10. When a interest is paid on a bond, what is the journal entry?
    • Interest Expense XX
    • Cash XX
    • Bonds Payable [DIFFERENCE]
  11. When a bond matures, what is the journal entry?
    • Bonds Payable XX
    • Cash XX
  12. What is a secured bond?
    A bond backed by an asset
  13. What is an unsecured bond?
    A bond unbacked by an asset
  14. What is a term bond?
    A bond where the issuer pays the principle amount to the bond holder at the END of the bond's life/term (most common)
  15. What is a serial bond?
    The issuer pays principle amount to the bond holder in installments over the bond's life/term
  16. Sinking Fund Bonds
    Issuer makes installment payments to a fund over the bond's life/term (company must set money aside)
  17. Bond Features: Callable & Convertible?
    • Callable bonds - issuer has the option to pay bonds off early
    • Convertible bonds - Bond owner has option to convert bonds into shares of common stock
  18. When a bond is issued at a premium, face value or discount...
    It is issued for more than face value, at face value or less than face value
  19. Define a stated interest rate
    The interest rate printed on the bond
  20. Define a market interest rate
    The interest rate currently used by investors
  21. How do you calculate AMOUNT PAID on a bond at the end of the period?
    • Stated Interest Rate * Face Value
    • (consider how often interest is compounded)
  22. How do you calculate Interest Expense on a bond at the end of the period?
    • Market Rate * Carrying Value
    • (constant when issued at face value)
  23. Aspects of an Operating Lease
    • -Record rent expense
    • -Ignore interest rates

    It's like an apartment, you just make payments to use it, you will never own it (it will never be an asset)
  24. Aspects of a capital lease...
    • -Recognize A & L
    • -Use interest rate

    You make payments to pay for an item you will eventually deplete
  25. Debt-Equity Ratio
    Total L / Total SE
  26. Return on Equity Ratio
    NI / Avg SE
  27. Times Interest Earned Ratio
    (NI + Interest Expense + Tax Expense) / Interest Expense
  28. Warranty Liability - what is it? What is the journal entry when created and then when used?
    • It is an expense and a liability at the same time...you are preparing to fix a problem.
    • Created:
    • Warranty Expense XX
    • Estimated Warranty Liability XX
    • Used:
    • Estimated Warranty Liability XX
    • Cash XX
  29. Par Value - definition & journal entry
    It is an outdated concept - subtracted from each share to make up your Additional Paid in Capital (APIC)

    • Cash XX
    • [Common/Preferred] Stock XX (# shares * par value)
    • APIC XX (REMAINDER)
  30. DIVIDENDS
    Date of....(3)
    -Name
    - JE
    • Date of Declaration
    • RE XX
    • Dividends Payable XX

    • Date of Record
    • NO ENTRY

    • Date of Payment
    • D/P XX
    • Cash XX
  31. Stock Dividends
    -Small vs. Large
    -JE
    • Small (< 25% of shares outstanding)
    • RE XX (# shares * market price)
    • C/S XX (# shares * par value)
    • APIC XX (Remainder)
    • -------
    • Large (≥ 25% of shares outstanding)
    • RE XX (# shares * par value)
    • C/S XX (# shares * par value)
  32. Return on Market Value of Equity Ratio (ROMVE)
    NI / Market Value of Equity
  33. Earnings per Share Ratio (EPS)
    NI / Avg # Shares Outstanding
  34. Price Earnings Ratio (PE)
    Stock Price / Earnings per share
  35. What makes up the difference between ROE & ROMVE?
    Intangible Assets
  36. What is the journal entry for repurchasing your own stock?
    • Treasury Stock XX (# shares * sale price)
    • Cash XX (equal)

    If the sale price doesn't equal the purchase price, adjust with a gain/loss
  37. What is the journal entry for reissuing stock?
    • When sale price > purchase price
    • Cash XX (sale price * # shares)
    • Treasury Stock XX (orig. purchase price * # shares)
    • APIC XX (remainder)

    • When sale price < purchase price
    • Cash XX (sale price * # shares)
    • APIC XX (remainder)
    • Treasury Stock XX (orig. purchase price * # shares)
  38. Cash Flows Statement
    -What is it?
    A statement that describes changes in the cash account
  39. Cash Flows Statement- what is it's purpose?
    To provide info about the operating performance of a firm....same purpose as the income statement
  40. What are the three sections of the CSF and what do they include?
    • Operating - I/S stuff (rev, exp)
    • Investing - Long term A & Current L,
    • Financing - External Financing Activities (debt/equity)
  41. What are the two methods of CSF and what is the difference between the two?
    • Direct - all three sections directly summarize cash inflows and outflows
    • Indirect - The operating section adjusts N/I to derive operating cash flows

    FINANCING AND INVESTING SECTIONS ARE THE SAME IN BOTH METHODS
  42. What are the four steps for preparing the CSF?
    • Prepare the operating section
    • Prepare the investing section
    • Prepare the financing section
    • Combine 3 sections and reconcile the net amount with cash balance reported in the balance sheet
  43. Preparing the Operating Section under in the Indirect Method
    • Start with NI
    • Adjust NI for "noncash" revenues/gains & exp/losses
    • Adjust NI for changes in current assets and current liabilities
    • Sum amounts to get net cash for Operating Activities
  44. Preparing the Operating Section under the Direct Method
    Go down the IS adjusting each rev & exp item to a cash accountSum amounts to get net cash
  45. Two steps for preparing the investing & financing sections under both methods
    • List inflows and outflows
    • Sum amounts to get net cash for each of the 2 activities
  46. Cash Return on Assets Ratio
    Operating Cash Flows / Avg. Total Assets
  47. Cash Return on Assets Ratio can be broken into:
    Operating Cash Flows to Sales Ratio & Asset Turnover Ratio
  48. Operating Cash Flows to Sales Ratio
    Operating Cash Flows / Net Sales
  49. Asset Turnover Ratio
    Net Sales / Avg. Total Assets
  50. What T chart do you use to calculate Cash Received?
    A/R
  51. What T chart do you use to calculate Cash Paid for Income Tax?
    Income Tax Payable
  52. What T chart do you use to calculate Cash Paid for Supplies?
    Use inventory to find purchases then plug purchases into A/P to find payment
  53. Which accounts should be taken at face value for adjustments on CSF?
    Any A/P
  54. Payment of Employee Salaries
    O - CO
  55. Sale of Land for cash
    I CI
  56. Purchase of rent in advance
    O - CO
  57. Collection of an A/R
    O CI
  58. Issuance of CS
    F CI
  59. Purchase of Inventory
    O CO
  60. Collection of Notes Receivable
    I CO
  61. Payment of Income Taxes
    O CO
  62. Sale of equipment for a note receivable
    no entry
  63. Issuance of bonds
    F CI
  64. Loan to another firm
    I CO
  65. Payment of a long term note payable
    F CO
  66. Purchase of treasury stock
    F CO
  67. Under the operating direct method, skip _________________ and come back to it because it can be easily adjusted for all other ________ accounts after other reconciliation.
    operating expenses, prepaid

What would you like to do?

Home > Flashcards > Print Preview