Exam 2 | ACIS 3115 - Intermediate Financial Acct, Quizzes of Financial Accounting

Download Exam 2 | ACIS 3115 - Intermediate Financial Acct and more Quizzes Financial Accounting in PDF only on Docsity! TERM 1 Notes DEFINITION 1 Valuingnon currentreceivables and payablesthat carryno stated interest rate or a lower than market interest rate TERM 2 Leases DEFINITION 2 Valuing assets and obligations to be capitalized under long term leases and measuring the amount of the lease payments and annual leasehold amortization TERM 3 Pensions DEFINITION 3 measuring service cost components of employer'spost retirementbenefits expense and postretirementbenefit obligations TERM 4 Long term assets DEFINITION 4 evaluating alternative long term investments by discounting future cash flows TERM 5 Stock Based Compensation DEFINITION 5 Determining the fair value of employee services in compensatory stock options plans TERM 6 Business Combinations DEFINITION 6 Determining the Value of receivables, payables, liabilities, accruals, and commitments acquired or assumed in a "purchase" TERM 7 Disclosure: DEFINITION 7 Measuring the value of future cash flows from oil and gas reserves for disclosure in supplementary information TERM 8 Environmental Liabilities DEFINITION 8 Determining the fair value of future obligations for asset retirement TERM 9 Principle DEFINITION 9 the amount borrowed or invested TERM 10 Interest rate DEFINITION 10 Percentage of the outstanding principle TERM 21 Present Value DEFINITION 21 the value now (present time) of a future sum or sums discounted assuming compound interest TERM 22 Discounting DEFINITION 22 reduces the amounts or values, so that the present value is less than the future value TERM 23 Annuity DEFINITION 23 Periodic payments or receipts (called rent) of the same amount TERM 24 Future value of an annuity DEFINITION 24 the sum of all the rents plus the accumulated compound interest on them TERM 25 ordinary annuity DEFINITION 25 rent that occurs at the end of the period TERM 26 annuity due DEFINITION 26 rent that occurs at the beginning of the period TERM 27 Effective Interest Method DEFINITION 27 Preferred procedure for amortization of a discount or premium TERM 28 Expected cash flow approach DEFINITION 28 uses a range of cash flows and incorporates the probabilities of those cash flows to provide a more relevant measurement of present value TERM 29 Risk free rate of return DEFINITION 29 Th pure rate of return plus theexpectedinflation rate. TERM 30 Cash DEFINITION 30 The most liquid of assets TERM 31 Cash equivalents DEFINITION 31 are short term, highly liquid investments that are both readily convertible to known amounts of cash and near theirmaturity TERM 32 Restricted cash DEFINITION 32 cash set aside for a particular purpose TERM 33 compensating balances DEFINITION 33 institutions maintain minimum cash balances in checking or savings account TERM 34 Bank overdrafts DEFINITION 34 occur when a company writes a check for more than the amount in its cash account TERM 35 receivables DEFINITION 35 are claims held against customers and others for money, goods or services TERM 46 Promissory note DEFINITION 46 a written promis to pay a certain sum of money at a specific future date TERM 47 Zero interest bearing notes DEFINITION 47 include interest as part of their face amount TERM 48 inputed interest rate DEFINITION 48 approximate an applicable interest rate that may differ from the stated rate TERM 49 fair value option DEFINITION 49 the receivables are recorded at fair value TERM 50 unrealized holding gains or loss DEFINITION 50 is the net change in the fair value of the receivable from one period to another TERM 51 Factoring receivables DEFINITION 51 associated with textile, apparel,footwear, furniture and homefurnishingindustries TERM 52 Securitization DEFINITION 52 takes a pool of assets such as credit card receivables, mortgage receivables, or car loan receivables, and sells shares in these pools of interest and principle payments. TERM 53 Without recourse DEFINITION 53 the purchaser assumes the risk of collectibility TERM 54 with recourse DEFINITION 54 the seller guarantees payment to the purchaser in the event the debtor fails to pay ... seller uses a financial component approach TERM 55 Inventories DEFINITION 55 are asset items that acompanyholds for sale in the ordinary course of business, TERM 56 perpetual inventory system DEFINITION 56 continuously tracks changes in the inventory account as they occur TERM 57 periodic inventory system DEFINITION 57 company determines the quantity of inventory on hand only periodically TERM 58 modified perpetual inventory system DEFINITION 58 provides detailed inventory records of increases and decreases in quantities only - not dollar amounts TERM 59 FOB shipping point DEFINITION 59 the buyer is responsible for goods TERM 60 FOB destination DEFINITION 60 seller is responsible for goods