Accounting 1 Test 3

Front 1

The net cash equivalent paid or to be paid for an asset

Back 1

Acquisition Cost

Front 2

Systematic and rational allocation of the acquisition cost of an intangible asset over its useful life

Back 2

Amortization

Front 3

interest expenditures included in the cost of a self-constructed asset

Back 3

Capitalized Interest

Front 4

Exclusive right to publish, use , and sell a literary, musical, or artistic work

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Copyright

Front 5

Method that allocates the net book value (cost minus acc. depreciation) of an asset over its useful life based on a multiple of the straight-line rate.

Back 5

Declining-Balance Depreciation

Front 6

Systematic and rational allocation of the cost of a natural resource over the period of its exploitation

Back 6

Depletion

Front 7

The process of allocating the cost of building and equipment over their productive lives using a systematic and rational allocation of the cost of property, plant, and equipment(but not land) over their useful lives

Back 7

Depreciation

Front 8

The expected service life of an asset to the present owner

Back 8

Estimated Useful Life

Front 9

A contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region

Back 9

Franchise

Front 10

For accounting purposes, the excess of the purchase price of a business over the fair value of the acquired businesses assets and liabilities

Back 10

Goodwill(Cost in excess of net assets acquired)

Front 11

Expenditures that increase the productive life, operating efficiency, or capacity of an asset and are reorder as increases in asset accounts, not as expenses.

Back 11

Improvements

Front 12

Assets that have special rights but no physical substance

Back 12

Intangible Assets

Front 13

Obtained through agreements with governmental units or agencies; permit owners to use public property in performing their services

Back 13

Licenses and Operating Rights

Front 14

Tangible and intangible resources owned by a business and used in its operations over several years

Back 14

Long-Lived Assets

Front 15

Assets occurring in nature, such as mineral deposits, timber tracts, oil, and gas.

Back 15

Natural Resources

Front 16

The acquisition cost of an asset less accumulated depreciation, depletion, or amortization

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Net Book Value(Carrying Value)

Front 17

Expenditures that maintain the productive capacity of an asset during the current accounting period only and are recorded as expenses

Back 17

Ordinary Repairs and Maintenance

Front 18

Granted by the federal government for an invention; gives the owner the exclusive right to use, manufacture, and sell the subject of the patent

Back 18

Patent

Front 19

The estimated amount to be recovered by the company, less disposal costs at the end of an assets estimated useful life

Back 19

Residual(or salvage) Value

Front 20

A simplified method of amortizing a bond discount or premium that allocates an equal dollar amount to each interest period

Back 20

Straight-Line Depreciation

Front 21

Assets that have physical substance

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Tangible Assets

Front 22

Includes costs for computer software and web development

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Technology

Front 23

An exclusive legal right to use a special name, image, or slogan

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Trademark

Front 24

method that allocates the depreciable cost of an asset over its useful life based on the relationship of its periodic output to its total estimated output

Back 24

Units-of-Production Depreciation

Front 25

Expenses that have been incurred but have not been paid at the end of the accounting period

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Accrued Liabilities

Front 26

A series of periodic cash receipts or payments that are equal in amount each interest period.

Back 26

Annuity

Front 27

Meets at least one of the four criteria established by GAAP results in the recording of an asset and liability

Back 27

Capital Lease

Front 28

A potential liability that has arisen as the result of a past event; it is not an effective liability until some future event occurs

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Contingent Liability

Front 29

short-term obligations that will be paid in cash (or other current assets_ within the current operating cycle or one year, whichever is longer.

Back 29

Current Liabilities

Front 30

Previously recorded liabilities that need to be adjusted at the end of the accounting period to reflect the amount of revenue earned; on the balance sheet, revenues that have been collected but not earned; liabilities until the goods or services have been provided

Back 30

Deferred Revenues

Front 31

timing differences caused by reporting revenues and expenses according to GAAP on a companies income statement and according to the Internal revenue Code on the tax return

Back 31

Deferred Tax Items

Front 32

The sum to which an amount will increase as the result of compound interest

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Future Value

Front 33

Probable debts or obligations of the entity that result from past transactions, which will be paid with assets or serices

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Liabilities

Front 34

the ability to pay current obligations

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Liquidity

Front 35

all of the entities obligations that are not classified as current liabilities

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Long-Term Liabilities

Front 36

does not meet any of the four criteria for a capital lease established by GAAP and does not cause the recording of an asset and liability

Back 36

Operating Lease

Front 37

The current value of an amount to be received in the future, a future amount discounted for compound interest.

Back 37

Present Value

Front 38

Timing differences that cause deferred income taxes and will reverse, or turn around, in the future.

Back 38

Temporary Differences

Front 39

Interest that is associated with the use of money over time

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Time Value of Money

Front 40

The dollar difference between total current assets and total current liabilities

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Working Capital

Front 41

The bond document that each bondholder receives

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Bond Certificate

Front 42

The difference between the selling price and par when a bond is sold for less than par

Back 42

Bond Discount

Front 43

The difference between the selling price and par when a bond is sold for more than par

Back 43

Bond Premium

Front 44

The amount (a) payable at which the maturity of the bond and (b) on which the periodic cash interest payments are computed

Back 44

Bond Principle

Front 45

Bonds that may be called for early retirement at the option of the issuer

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Callable Bonds

Front 46

Bonds that may be converted to other securities of the issuer(usually common stock)

Back 46

Convertible Bonds

Front 47

The stated rate of interest on bonds

Back 47

Coupon Rate

Front 48

An unsecured bond; no assets are specifically pledged to guarantee repayment

Back 48

Debenture

Front 49

amortizes a bond discount or premium on the basis of the effective-interest rate; it is the theoretically preferred method

Back 49

Effective-Interest Amortization

Front 50

The current rate of interest on a debt when incurred; also called the market interest rate

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Effective-Interest Rate(Yield)

Front 51

Another name for bond principal or the maturity amount of a bond

Back 51

Face Amount

Front 52

A bond contract that specifies the legal provisions of a bond issue

Back 52

Indenture

Front 53

the current rate of interest on a debt when incurred; also called yield or effective-interest rate

Back 53

Market Interest Rate

Front 54

(1) the nominal value per share of capital stock established by the board of directors; serves as the basis for legal capital; it establishes the minimum amount a stockholder must contribute and has no relationship to the market price of the stock. (2) also, another name for bond principle.

Back 54

Par Value

Front 55

The rate of cash interest per period specified in the bond contract

Back 55

Stated Rate

Front 56

a simplified method of amortizing a bond discount or premium that allocates an equal dollar amount to each interest period

Back 56

Straight-Line Amortization

Front 57

An independent party appointed to represent the bondholders

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Trustee

Front 58

the current rate of interest on a debt when incurred; also called the market interest rate

Back 58

Yield