ACCT5

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Author:
agentydoc
ID:
77799
Filename:
ACCT5
Updated:
2011-04-12 19:54:51
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Accounting Exam Five
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Description:
Accounting Exam V
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  1. Liabilities
    are probable debts or obligations that result from past transactions, which will be paid with assets or services.
  2. Current Liabilities
    are short-term obligations that will be paid within the current operating cycle or one year, whichever is longer.
  3. Liquidity
    is the abilility to pay current obligations.
  4. Accrued Liabilities
    are expenses that have been incurred but have not been paid at the end of the accounting period.
  5. Time Value of Money
    is interest that is associated with the use of money over time.
  6. Deferred Revenues
    are revenues that have been collected but not earned; they are liabilities until the goods or services have been provided.
  7. Contingent Liability
    is a potential liability that has arisen as the result of a past event; it is not an effective liability until some future event occurs.
  8. Working Capital
    is the dollar difference between total current assets and total current liabilities.
  9. Long-Term Liabilities
    are all of the entity's obligations not classified as current liabilities.
  10. Operating Lease
    does not meet any of the four criteria established by GAAP and does not cause the recording of an asset and liability.
  11. Capital Lease
    meets at least one of the four criteria established by GAAP and results in the recording of an asset and liability.
  12. Present Value
    is the current value of an amount to be received in the future; a future amount discounted for compound interest.
  13. Annuity
    is a series of periodic cash receipts or payments that are equal in amount each interest period.
  14. Deferred Tax Items
    exist because of timing differences caused by reporting revenues and expenses according to GAAP on a company's income statement and according to the Internal Revenue Code on the tax return.
  15. Temporary Differences
    are timing differences that cause deferred income taxes and will reverse or turn around, in the future.
  16. Future Value
    is the sum to which an amount will increase as the result of compound interest.
  17. Bond Principal
    is the amount (a) payable at the maturity of the bond and (b) on which the periodic cash interest payments are computed.
  18. Par Value
    is another name for bond principal, or the maturity amount of a bond.
  19. Face Amount
    is another name for bond principal, or the maturity amount of the bond.
  20. Stated Rate
    is the rate of cash interest per period stated in the bond contract.
  21. Debenture
    is an unsecured bond; no assets are specifically pledged to guarantee repayment.
  22. Callable Bond
    may be called for early retirement at the option of the issuer (usually common stock).
  23. Indenture
    is a bond contract that specifies the legal provisions of a bond issue.
  24. Bond Certificate
    is the bond document that each bondholder receives.
  25. Trustee
    is an independent party appointed to represent the bondholders.
  26. Coupon Rate
    is the stated rate of interest on bonds.
  27. Market Interest Rate (Yield)
    is the current rate of interest on a debt when incurred.
  28. Bond Premium
    is the difference between the selling price and par when the bond is sold for more than par.
  29. Bond Discount
    is the difference between the selling price and par when the bond is sold for less than par.
  30. Straight-Line Amortization
    is the simplified method of amortizing a bond discount or premium that allocates an equal dollar amount to each interest period.
  31. Effective-Interest Amortization
    is a method of amortizing a bond discount or premium on the basis of the effective-interest rate; it is the theoretically preferred method.
  32. Times Interest Earned
    Net Income + Interest Expense + Income Tax Expense / Interest Expense
  33. Debt-to-Equity
    Total Liabilities / Stockholder's Equity

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