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30 Cards in this Set

  • Front
  • Back
accrued liabilities
the liability to pay an expense that has accrued during the period. aka accrued expenses
a statistician who performs computations involving assumptions as to human life spans. One function is computing companies' liabilities for pensions and postretirement benefits
amortization table
a schedule that indicates how installment payments are allocated between interest expense and repayments of principal
a legal status in which the financial affairs of an illiquid business (or indivual are managed, in large part, by the U.S. bankruptcy court
bonds payable
long-term debt securities that subdivide a very large and long-term corporate debt into transferable increments of $1000 or multiples thereof
capital lease
a lease contract that finances the eventual purchase by the lessee of lease dproperty. the lessor accounts for a capital lease as a sale of properth' the lessee records an asset and a liability equal to the present value of the furute lease payments. aka financing lease
assets that have been pledged to secure specific liabilities. creditors w/ secured claims can foreclose on (seize title to) these assets if the borrower defaults.
agreements to carry out future transactions. although they are not a liability (because the transaction has not yet been performed), they may be disclosed in notes to the financoal statements
convertible bond
a bond that may be exchanged (at the bondholder's option) for a specifited number of shared of the company's capital stock.
debt service
the combined cash outlays required for repayment of principle amounts borrowed and for payments of intrest expense during the period
Deferred Income Taxes
a liability account to pya income taxes that have been postponed to a future year's income tax return. in some cases, this account can also be an asset account representing income taxes to be saved in a future year's income tax return
estimated liabilities
liabilities known to exist, but that must be recorded in the accounting records at estimated dollar amounts
interest coverate ratio
operating income divided by interest expense. indicateds the number of times that the company was able to earn the amount of its interest charges
junk bonds
bonds payable that involve a greater than normal risk of default and, therefore, must pay higher than normal lrates of interest in order to be attractive to the investors
the tenant, user, or renter of a leased property
the owner of property elased to a lessee
the use of borrowed money to finance business operations
lost contingencies
situations involving uncertainty as to whether a los has occurred. the uncertainty will be resolved by a future event. an example of a loss contingency is the possible loss relating to a lawsuit pending against a company. although loss contingencies are somtiems recorded in the accounts, they are more frequently disclosed only in notes to the financial statements
maturity date
the date on which a liability becomes due
off-balance sheet financing
an arrangement in which the use of resources is financed with out hte oblitgaion for future payments appearing as a liability in the balance sheet. an operating lease is a common example of off-balance sheet financing
operating lease
a lease contract which is in essence a rental agreement. the lessee has the use of the lease property, but the lessor retains the usual reisks and rewards of ownership. the periodic lease payments are accounted for as rent expense by the lessee and as rental revenue by the lessor
payroll taxes
taxes levied on an employer based on teh amount of wages and salaries being paied to employees during the period. they include the employer's share ofSocial Security and Medicare taxes, unemployemnt taxes, and (through not called a "tax") workders' compensation premiums
pension fund
a fund managed by an independednt trustee into which an employer-company makes periodic payments. the fund is used to make psneion payments to retired employees
post retirement beneifts
benefits that will be paid to retired workers. the present value of the future benefits earned by workers during the current period is an expense of the period. if not fully funded, this expense resultes in a liaility for unfunded postretirement benfits (for many companies, these liabilities have become very large)
present value (of future amount)
the amount of money that an informed investory would pay today for teh right to recieve the future amount, based on a specifit cate of return required by the investor
principal amount
the unpaid balance of an oblication, exclusive of any intrest charges for the current period
sinking fund
cash set aside by a corporation at regular intervals (usually with a trusttee) for the purpose of repaying a bond issue at its maturity date
special purpose entities
SPEs are seperate entities established by corporations to accomplish specific purposes. SPE's are often useed to borrow money and then transfer it to the sponsoring corporation as an off-balance sheet financing arrangement
an investment banking firm that handles the sale of a corporation's stocks or bonds to the public
worker's compensation
a state-mandated insurance program insuring workders against job-related injuries. Premiums are charged to employers as a percentage of employees' wages and salaries. The amounts vary by state and by the employees' occupations but, in some cases, can be very substantial