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45 Cards in this Set
- Front
- Back
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Callable Bond |
When the issuer of a bond has the right to pay off a bond before its maturity |
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The City of Carrollton issues 100 3% bonds with a face value of $1,000, the bonds sell at $95. The journal entry to record the bond issuance is. |
Cash. 95000 DOBP. 5000 Bonds payable. 100,000 |
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Convertible Bond |
A bond that can be exchanged for stock at the option of the bondholder |
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If a company issues 200 4.5% 1000 face value bonds and they sell at 101.5, then the bonds are sold at what? |
Premium |
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When the market rate of interest is above stated rate, then bonds sell at what |
Discount |
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If a $1,000 5% Bond sells at 102.5, it means that |
The market rate of interest is less than the stated rate on the bond |
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The number of shares of issued stock capital or what? |
Outstanding shares plus treasury shares |
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The contributed capital of a corporation does not include what?? |
Retained earnings |
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The maximum number of shares of common stock that may be sold according to the corporation's Charter is referred to as what? |
Authorized shares |
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Holders of preferred stock normally do not have what? |
Full voting rights |
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Outstanding shares |
Issued shares held by stockholders |
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To evaluate stockholders profitability, investors use the ratio called what? |
Earnings per share |
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On the balance sheet, treasury stock owned by the company is classified properly as what? |
Contra stockholders equity |
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Which of the following statements does not apply to common stock? |
Dividends paid are an expense shown on the income statement |
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The effect on the accounting equation of the Declaration and payment of a cash dividend is what? |
Decrease assets and decrease stockholders equity |
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A bond that can't be we called and we tired by the issuing Corporation before maturity is what? |
Callable Bond |
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If the bondholder has the right to exchange a bond for shares of common stock the bond is called out what? |
Convertible Bond |
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Equation for outstanding stock |
Issued stock minus treasury stock |
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Dividends in arrears are dividends on what? |
Cumulative preferred stock. Have not been declared for some specific. Of time. |
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If a corporation declares a 3-for-Stock split, which of the following will occurred. |
The new par value will be one third of the pre-split par value |
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Retained earnings account balance is |
The accumulated earnings from all prior years that have not been distributed to stockholders |
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Authorized stocks represent the what? |
The maximum number of shares that can be issued by corporation |
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Minimum price for stock when first issued |
Par Value |
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Capital lease would appear on the balance-sheet as what? |
Long-term asset |
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Depreciation expense is that what? |
Non-cash expense |
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The right to purchase a stock at a set price |
A stock option |
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The board of directors of Bill fruit wholesale Inc, votes to purchase treasury stock. The reason the corporation may decide to do this is to why? |
Have stock available to cover employee stock options |
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The accrual of Revenue results in a debit to what? |
An asset notes payable due in 5 years are shown on the financial statement as what? |
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Notes payable doing five years are showing in the financial statement as what? |
Long-term liability |
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In order of appearance, the three major activities found on the statement of cash flow are |
Operating, investing, financing |
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Issuing common stock is part of which activity on the cash flow statement. |
Financing |
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Interest expense is part of what activity |
Operating |
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Depreciation expense is what kind of activity on the cash flow statement? |
None, depreciation expense is a non-cash expense there by doesn't belong on the cash flow statement |
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A positive adjustments to net income will be made in the cash flow from what activities when a positive adjustment to net income is made because of the depreciation expense. |
Operating |
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Service revenue on account in the amount of 62 million dollars will increase Caster from what activity on the statement of cash flow? |
None, it will increase the accounts receivable not cash |
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The distribution of dividends is part of what activity in the statement of cash flow? |
Financing |
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Buying equipment is part of what activity? |
Investing |
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Repaying principle for a notes payable is what kind of activity? |
Financing |
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Going through with regard to the statement of cash flow, what what method is preferred by the fasb? What method is normally used? |
1. Direct / 2. indirect |
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In what order is the financial statements report prepared |
1. Income statement 2. Statement of stockholders equity 3. Balance sheet 4. Statement of cash flow |
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What is the equation for times interest earned (Cash basis) |
Cash flow from operations + interest paid + taxes paid / interest paid |
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Equation of times interest earned (accrual basis) |
Net income + interest expense + tax expense / interest expense |
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Equation for Return on Common Equity |
Net income - preferred dividends / average common stockholders equity |
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Earnings Per Share equation |
Net income - preferred dividends / average common stockholders equity |
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After tax cost of Interest equation |
1 - tax rate X interest expense |
