Chapter 21
A corporation typically sells this in order to get money from investors
What are stocks?
A company usually tries to replace, sell, or discard this while the it still has some monetary value
What is a plant asset?
Another term for bad debts
What are uncollectible accounts?
This inventory method assumes that the first items purchased are the ones still remaining in inventory at the end of the period.
What is LIFO?
A written promise to pay a certain amount of money at a specific time
What is a promissory note?
The holders of this kind of stock will be paid dividends before other types of stockholders.
What is preferred stock?
The allocation of the cost of a plant asset over the useful life of that asset
What is depreciation?
A financial account that offsets the balance of a related account
What is a contra account?
This inventory method assumes that the items still in inventory were the last ones purchased.
What is FIFO?
The date on which a note is written
What is the issue date?
If a company sells stock, this is the account that will be debited.
Cash in bank
The total amount of depreciation for a plant asset that has been recorded up to a specific time
What is accumulated depreciation?
This kind of ledger is used with the controlling account of Accounts Receivable to keep track of individual accounts.
What is a subsidiary ledger?
The current price being charged for an item of merchandise in the market
What is market value?
The amount of time the borrower has to repay a promissory note
What is the term?
This kind of stock can be sold at par value or at a price higher than par value.
What is common stock?
Its cost is not depreciated because it is assumed that it has an unlimited useful life
What is land?
The amount a business can reasonably expect to collect from its accounts receivable
What is book value?
How much each item costs individually
What is unit cost?
The due date of a note or the date on which the principal and interest must be paid
What is the maturity date?
When a company declares a dividend, this is the credit side of the journal entry.
What is dividends payable?
These assets are either used up or converted to cash during the normal operating period
What are current assets?
What uncollectable accounts finally become to a business.
What is an expense?
Revenue - COGS (cost of goods sold)
What is gross profit?
This is based on three factors: principal, interest rate, and term of the promissory note
What is interest?