of a company’s liabilities divided by the total amount of the company’s assets. Note: Debt includes more than loans and bonds payable. Debt is the total amount of all liabilities (current liabilities and long-term...
of a company’s liabilities divided by the total amount of the company’s assets. Note: Debt includes more than loans and bonds payable. Debt is the total amount of all liabilities (current liabilities and long-term...
of contra accounts that will result in the balance sheet totals being different from the post-closing trial balance totals include: Allowance for Doubtful Accounts Discount on Bonds Payable Bond Issue Costs Owner’s...
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...
at maturity. Let’s also assume that after the bonds are issued the market interest rates increase by one percentage point. As a result the 5% bond will lose some of its value because the contractual payment of $50 per...
and it is often used to compute the net present value of the cash flows in a proposed investment. It is also considered to be the minimum after-tax internal rate of return to be earned on new investments. For a...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on 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...
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.
of a corporation’s earnings to its cash flows from __________ activities is often used to assess the quality of earnings. Select... financing investing operating 3. A highly profitable corporation with $30 million in...
Our Explanation of Stockholders' Equity covers the unique terminology for a corporation's paid-in capital, retained earnings, treasury stock, and accumulated other comprehensive income. Included are cash dividends, stock...
RFPTIO Unscramble PROFIT IOFRTP Unscramble 13. Bonds payable will be reported as a long-term ____________. LIABILITY ILTIYABLI Unscramble LIABILITY AITLILBYI Unscramble 14. Financial statements are best prepared under...
dividends reduce the corporation’s cash and its retained earnings, which is reported on the balance sheet as part of stockholders’ equity. Cash dividends are not liabilities until they are declared by the...
Our Explanation of Adjusting Entries gives you a process and an understanding of how to make the adjusting entries in order to have an accurate balance sheet and income statement. Eight examples including T-accounts for...
Right! If revenues minus all expenses (fixed and variable, and including cost of goods sold) equals zero, you are at the break-even point. False Wrong. If revenues minus all expenses (fixed and variable, and including...
Our Explanation of Debits and Credits describes the reasons why various accounts are debited and/or credited. For the examples we provide the logic, use T-accounts for a clearer understanding, and the appropriate general...
number of shares after a 3-for-2 stock split or after a __________ 50%% stock dividend. 21. A corporation's own shares of stock that have been reacquired from its stockholders but have not been retired are called...
Our Explanation of Present Value of an Ordinary Annuity uses the appropriate present value factors for discounting a stream of equal cash amounts occurring at equal time intervals. An important feature is the use of loan...
accounts because the account balances are closed at the end of the accounting year. When the income statement accounts are closed, the net amount will be recorded in a stockholders’ (or owner’s) equity account. The...
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 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 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 Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
This amount is an asset’s cost minus its accumulated depreciation. It is also the face value of bonds minus its unamortized discount (or plus its unamortized premium). It is also the amount of a corporation’s...
Break-even Point Break-even Point The break-even point is the level of sales that result in a business having a net income of zero. In other words, its revenues will be exactly equal to its expenses. The break-even point...
. The allowance account must be a zero or credit balance when reported on the balance sheet. Credit Right! 9. On which financial statement would you expect to find Allowance for Doubtful Accounts? Balance Sheet Right!...
. Select... credit debit 14. Accounts receivable will be reported on the balance sheet after cash and __________ inventory. Select... before after 15. When reporting the Allowance for Doubtful Accounts on the balance...
liability accounts normally have credit balances, a contra liability account is expected to have a debit balance. Discount on Bonds Payable and Bond Issue Costs are contra accounts to the liability account Bonds...
for Revenues and Expenses are Temporary Accounts At the end of each accounting year, the income statement accounts (revenues, expenses, gains, losses) are closed to a stockholders’ (owner’s) equity account. As a...
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 Bank Reconciliation will show you the needed adjustments to the balance on the bank statement and also the adjustments needed to the balance in the related general ledger account. A comprehensive...
liability account This type of general ledger liability account will have a debit balance. An example is Discount on Bonds Payable. contra liability account This type of general ledger liability account will have a...
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...
liabilities, stockholders’ equity, and short-term loans. For example, if the corporation issues common stock or bonds, the amount received will be reported as a positive amount since this provides cash, which is...
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...
with bonds instead of stock? Select... Income tax savings Less risk 22. In the debt to equity ratio, debt refers to __________ liabilities. Select... current long-term total 23. A higher degree of leverage will mean a...
, vehicles, etc. Liabilities Liabilities are the obligations that a corporation owes as of the final moment of the date shown in the heading of the balance sheet. Examples of liabilities include accounts payable, loans...
(wages, interest, utilities), deferred revenues, and bonds payable. Stockholders’ equity includes paid-in capital, retained earnings, accumulated other comprehensive income, and treasury stock. Because of the cost...
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...
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