's net income will cause a change in which component of stockholders' equity? Accumulated Other Comprehensive Income Wrong. Paid-in Capital Wrong. Retained Earnings Right! 7. Which financial statement's...
's net income will cause a change in which component of stockholders' equity? Accumulated Other Comprehensive Income Wrong. Paid-in Capital Wrong. Retained Earnings Right! 7. Which financial statement's...
YTEPT Unscramble PETTY EYPTT Unscramble 13. Inventory is reported as a __________ asset. CURRENT UCRNRTE Unscramble CURRENT ECRTURN Unscramble 14. One section of stockholders' equity is paid-in or contributed...
. The stockholders’ equity section of the balance sheet is divided into several parts: Paid-in (or contributed) capital Retained earnings Accumulated other comprehensive income Treasury stock Stockholders’ equity...
Our Explanation of Accounting Equation (or bookkeeping equation) illustrates how the double-entry system keeps the accounting equation in balance. You will see how the revenues and expenses on the income statement are...
Our Explanation of Bonds Payable covers the recording of bonds, the accrual of interest expense, and the amortization of the discount and premium on bonds payable. You gain an understanding on why the market value of...
of $735,000; total assets of $950,000; current liabilities of $180,000; noncurrent liabilities of $530,000; total liabilities of $710,000; and total stockholders’ equity of $240,000. What is the amount of the...
on the right side or credit side. 10. What is the normal balance for the owner’s equity account entitled R. Smith, Capital? Select... Debit balance Credit balance View Coaching The owner's equity account R....
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
the Cash account for $800. Since every entry must have debits equal to credits, the company will need to debit another account for $800. In this case, the account is Rent Expense. (Eventually the debit balance in the...
by the owners plus the company’s earnings that the owners chose not to withdraw as dividends or drawings. Additional Balance Sheet Information The balance sheet classifications allow the reader to easily compute the...
a stock dividend instead of paying a cash dividend for the following reasons: To increase the number of shares of stock outstanding To reduce the market price per share of stock To transfer some of the corporation’s...
that the number of shares has changed and that the par value per share has changed (if the stock has a par value). However, a typical journal entry (one with a debit and a credit) is not needed since the total dollar...
Unscramble DIVIDENDS VIDIEDSND Unscramble 8. Capital _______________ are a significant deduction in the investing activities section of the statement of cash flows. EXPENDITURES TEEDIENUSPRX Unscramble EXPENDITURES...
in exchange for cash or other assets. Donated capital was received. Here is a list of items that could cause a decrease in the total amount of a corporation’s stockholders’ equity: Negative net earnings or a net...
statement Therefore, if too much of the total cost is assigned to the ending inventory, too little will be assigned to the cost of goods sold. And vice versa. Further, the cost reported as inventory will affect the...
What is preferred stock? Definition of Preferred Stock Preferred stock is a type of capital stock issued by some corporations in addition to its common stock. Preferred stock is also known as preference stock. The word...
, Accumulated Depreciation, Notes Payable, Accounts Payable, Payroll Taxes Payable, Paid-in Capital, Retained Earnings, and others. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
the financial statements with the management and owners of the company. The accountant will also be involved in budgeting of operations and capital improvements, cost accounting, reports to government agencies, and...
, capital budgeting for expanding operations, standard costing and the reporting of variances, transfer pricing, etc. Special analyses includes cost behavior, cost-volume-profit relationships, make or buy decisions,...
that an asset is acquired. Further, the amount recorded will not be increased for inflation or improvements in market value. (An exception is the change in market value of a short-term investment in the capital stock of...
, the U.S. accounting rules require that the cost of the obsolete inventory items be reduced to their net realizable value. Failure to reduce their cost will mean that the following amounts on the company’s financial...
position and the for-profit corporation’s balance sheet is the equity section: The for-profit corporation’s equity section has the heading Stockholders’ Equity. Within this section are the paid-in capital amounts...
-term assets. Similarly, current liabilities are reported in a section that is separate from long-term liabilities. This allows bankers, owners, and others to easily compute the amount of an organization’s working...
will begin each accounting year with a zero balance and will have its balance at the end of the year closed to an equity account such as a corporation’s retained earnings or a proprietor’s capital account....
and distribute to its stockholders, the following corporation information should be considered: Present cash balance Cash needed to finance the business operations (growth, inflation, etc.) Cash needed to finance future...
of the owner’s capital account and a drawing account. The drawing account is a temporary account in which the owner’s current year draws or withdrawals are recorded. The sole proprietor withdraws money for personal...
depends on each state’s regulations.) The balance in Common Stock will be reported in the corporation’s balance sheet as a component of paid-in capital, a section within stockholders’ equity. Example of Common...
and transferred to the owner’s capital account, thereby increasing owner’s equity. (At a corporation, the credit balances in the revenue accounts will be closed and transferred to Retained Earnings, which is a...
What is DCF? In accounting, DCF refers to discounted cash flows or to the discounted cash flow techniques such as net present value or internal rate of return. DCF is a preferred method for evaluating capital...
to the corporation’s Retained Earnings account, or to the sole proprietorship’s Owner’s Capital account.) Example of Crediting Sales Recall that asset accounts normally have debit balances and the liability and...
method, the interest expense will be included in the company’s net income or net earnings. The interest expense is adjusted to a cash amount through the changes to the working capital amounts, which are also reported...
(revenues, expenses, gains, losses) as temporary accounts because their balances will be closed and transferred to the owner’s capital account at the end of the year. Join PRO to Track Progress Mark the Question as...
of the inventories is lower than the cost. Companies should physically count their inventories at least once a year and the calculations reviewed carefully since the cost of the inventory is critical in the calculation...
of a corporation, the equity account is Retained Earnings. In the case of a sole proprietorship, the equity account is the owner’s capital account. As a result, the income statement accounts will begin the next...
bonds. The result is that liabilities decrease and stockholders’ equity increases. 3) A corporation declares a cash dividend. A current liability Dividends Payable is created and the Retained Earnings (part of...
similar to the sole proprietor’s Drawing account and Capital account which are part of owner’s equity. Both the Dividends account and the Drawing account are temporary balance sheet accounts since they are closed at...
computed when evaluating potential capital expenditures. However, the payback period is considered to be flawed because it ignores the following: Cash flows occurring after the payback period Time value of money. Join...
property, equipment, vehicles, or it expands its facilities, etc., it is assumed to be using or reducing the company’s cash and cash equivalents. As a result, these investments and capital expenditures are reported as...
year. Examples of the Columns Often Appearing on the Statement The statement usually has the following columns into which the amounts will be sorted: Common stock issued – number of shares Common stock issued –...
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