Card Set Information
Accounting Exam Five
Accounting Exam V
are probable debts or obligations that result from past transactions, which will be paid with assets or services.
are short-term obligations that will be paid within the current operating cycle or one year, whichever is longer.
is the abilility to pay current obligations.
are expenses that have been incurred but have not been paid at the end of the accounting period.
Time Value of Money
is interest that is associated with the use of money over time.
are revenues that have been collected but not earned; they are liabilities until the goods or services have been provided.
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.
is the dollar difference between total current assets and total current liabilities.
are all of the entity's obligations not classified as current liabilities.
does not meet any of the four criteria established by GAAP and does not cause the recording of an asset and liability.
meets at least one of the four criteria established by GAAP and results in the recording of an asset and liability.
is the current value of an amount to be received in the future; a future amount discounted for compound interest.
is a series of periodic cash receipts or payments that are equal in amount each interest period.
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.
are timing differences that cause deferred income taxes and will reverse or turn around, in the future.
is the sum to which an amount will increase as the result of compound interest.
is the amount (a) payable at the maturity of the bond and (b) on which the periodic cash interest payments are computed.
is another name for bond principal, or the maturity amount of a bond.
is another name for bond principal, or the maturity amount of the bond.
is the rate of cash interest per period stated in the bond contract.
is an unsecured bond; no assets are specifically pledged to guarantee repayment.
may be called for early retirement at the option of the issuer (usually common stock).
is a bond contract that specifies the legal provisions of a bond issue.
is the bond document that each bondholder receives.
is an independent party appointed to represent the bondholders.
is the stated rate of interest on bonds.
Market Interest Rate (Yield)
is the current rate of interest on a debt when incurred.
is the difference between the selling price and par when the bond is sold for more than par.
is the difference between the selling price and par when the bond is sold for less than par.
is the simplified method of amortizing a bond discount or premium that allocates an equal dollar amount to each interest period.
is a method of amortizing a bond discount or premium on the basis of the effective-interest rate; it is the theoretically preferred method.
Times Interest Earned
Net Income + Interest Expense + Income Tax Expense / Interest Expense
Total Liabilities / Stockholder's Equity