Financial Accounting Terms and Concepts, Quizzes of Financial Accounting

Download Financial Accounting Terms and Concepts and more Quizzes Financial Accounting in PDF only on Docsity! TERM 1 Primary users of financial information? DEFINITION 1 Investors and Creditors TERM 2 Accounting Equation DEFINITION 2 Assets = Liabilities +Stockholder's Equity TERM 3 What is a liability? DEFINITION 3 amounts owed to creditors (ex. supplier, workers etc.) TERM 4 Formula for net income? DEFINITION 4 Revenues - Expenses TERM 5 Contents of the Balance Sheet DEFINITION 5 AssetsLiabilitiesStockholder's Equity TERM 6 What's the most important item to influence stock prices? DEFINITION 6 Net Income TERM 7 Impact of issuing common stock on the accounting equation DEFINITION 7 Assets +Stockholder's Equity + TERM 8 Impact of sales to customers on account on the accounting equation DEFINITION 8 Assets +Stockholder's Equity + TERM 9 Impact of paying a dividend on the accounting equation DEFINITION 9 Assets -Sotckholder's Equity - TERM 10 Revenue recognition principle DEFINITION 10 revenue is recorded in the period that it is earned TERM 21 What determines the amount of goodwill? DEFINITION 21 purchase price - fair value TERM 22 Calculation of depreciation expense (straight- line) DEFINITION 22 Assets cost - Residual Value Service Life TERM 23 Calculation of Profit Margin DEFINITION 23 Net IncomeNet Sales TERM 24 Who pays FICA taxes? DEFINITION 24 employees & employers TERM 25 How does unearned revenue occur? DEFINITION 25 company receives cash in advance from its customerit is a current liability TERM 26 Calculation of sales tax when it's not seperately recorded DEFINITION 26 Total cash paid $1 + sales tax rate TERM 27 When do you record a contingent liability? DEFINITION 27 It has to be probable to occur and the ability to estimate the payment is known or reasonable TERM 28 When to record a warranty expense? DEFINITION 28 when the sale is made (matching principle) TERM 29 What is liquidity? DEFINITION 29 having sufficient current assets to pay of current debts TERM 30 Current Ratio Formula DEFINITION 30 Current Assets Current Liabilities TERM 31 What is authorized common stock? DEFINITION 31 the total number of shares available to sell (issued and unissued) TERM 32 What is outstanding common stock? DEFINITION 32 Stocks held by the investors (excludes treasury stock) TERM 33 Make-up of common stock account when there is a par value DEFINITION 33 Credit Common Stock account for the number of shares issued multiplied by the par value per shareCredit Additional Paid-in Capital for the portion of cash proceeds above par value. TERM 34 Impact of treasury stock on the accounting equation DEFINITION 34 repurchase of stock Assets - Stockholder's Equity - Reissue of stock Assets + Stockholder's Equity + TERM 35 Important dates of entries in connection with a cash dividend DEFINITION 35 Declaration DatePayment Date