an investor for new shares of the company’s common stock Example of Both a Revenue and a Receipt When a company makes a $200 cash sale (or performs services for $200 of cash) the company has earned revenue of $200 and...
an investor for new shares of the company’s common stock Example of Both a Revenue and a Receipt When a company makes a $200 cash sale (or performs services for $200 of cash) the company has earned revenue of $200 and...
from the owners as well as any dividends or withdrawals distributed to the owners. For example, if stockholders’ equity increased by $5 million with $2 million caused by the issuance of new shares of stock, and $1...
will be refinanced by issuing new bonds, another long-term liability, or by issuing shares of stock. It appears the focus is on the company’s working capital (current assets minus current liabilities). If the company...
or stock.) Principal due after one year is reported as a long-term liability Example of Note Payable and Bond Payable Assume that a corporation recently borrowed $200,000 in the form of a note payable due in two years...
of a publicly traded corporation. It uses the weighted average number of shares of common stock outstanding. earnings per share (or) EPS This amount is required to appear on the income statement of a publicly traded...
Our Explanation of Income Statement helps you learn the most important features of a corporation's income statement (also known as the statement of operations or profit and loss statement). We provide more understanding...
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 accounts trial balance 27. In accounting, the word expenses has the same meaning as the word payments. Select... True False 28. Under the accrual method of accounting, which of the following are revenues? Select......
Our Explanation of Chart of Accounts shows how a typical chart of accounts is organized and examples of possible account numbering. It concludes with a quick review of debits and credits.
statement will display the amounts for the most recent accounting year and also the amounts for the prior year or two. 38. A corporation’s stockholders’ equity is an excellent indicator of the corporation’s market...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
entitled Bonds Payable. Typically the issuer of the bonds agrees to pay the bondholders: interest every six months (semiannually), and the face or maturity value when the bonds come due Why Bonds? Why Not Common Stock?...
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...
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 __________ accrual basis of accounting. 4. Corporations whose stock is publicly traded must have their financial statements __________ audited by independent certified public accountants. 5. The U.S. government...
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...
: The accounting equation has liabilities on the right side. The liability accounts will normally have their balances on the right side or credit side. 9. What is the normal balance for a stockholders’ equity account...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
assumption is that an enterprise will continue on long enough to carry out its objectives and commitments. GOING NGIGO Unscramble GOING INGOG Unscramble 12. The U.S. government agency with authority over the reporting...
. Earnings per share must be reported on the income statement when a corporation's stock is publicly ___________. TRADED ETRADD Unscramble TRADED DDTERA Unscramble 12. An increase in net assets from a peripheral...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
, issuing and/or repurchasing of capital stock, declaring of dividends to stockholders, and draws made by an owner. Cash flows from operating activities We will focus on the first section of the SCF, cash flows from...
by corporations whose stock is publicly traded. SEC (or) Securities and Exchange Commission This U.S. government agency has regulatory authority over the reporting by corporations whose stock is publicly traded. Mark as...
the period of time shown in the heading of the income statement. The period of time (or time interval) could be a year, quarter, five months, one month, 52 weeks, 4 weeks, etc. If the corporation’s shares of common...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
type of account? Select... Current asset Current liability Income statement 25. If a U.S corporation’s shares of stock are traded on a stock exchange, which report will contain management’s discussion of the...
incentive for a profitable corporation to issue bonds instead of stock is that the interest is __________ for income tax purposes whereas dividends are not. 10. Bonds that can be exchanged for a predetermined number of...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
balance a debit entry is needed. Stockholders’ (or Owner’s) Equity Accounts Will Have Credit Balances Some examples of stockholders’ (or owner’s) equity accounts include: Common Stock Paid-in Capital in Excess...
noncash investing and financing activities The exchange of common stock for property is an example of these activities, which are part of the supplemental disclosures required for the statement of cash flows....
Wrong. Liabilities are not involved in this transaction. No Effect Right! Liabilities are not involved in this transaction. Owner's (or Stockholders') Equity Increase Right! The proprietor's Capital...
Our Explanation of Nonprofit Accounting includes a chart that contrasts the financial statements of a nonprofit (or not-for-profit) organization with those of a for-profit business corporation. There are many examples to...
will likely see an increase or decrease when a corporation prepares its financial statements at the end of the accounting year? Select... Common Stock Retained Earnings 30. A corporation’s balance sheet and income...
. A corporation's working capital is calculated using which amounts? Total Assets And Total Liabilities Wrong. Total Assets And Current Liabilities Wrong. Current Assets And Current Liabilities Right! 14. The...
Our Explanation of Inventory and Cost of Goods Sold will take your understanding to a new level. You will see how the income statement and balance sheet amounts are affected by the various inventory systems and cost flow...
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For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
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