Chapter 1+2
Name the J/E: Recording the issuance of common stock; 20,000
Dr. Cash
Cr. Common Stock
includes assets that are cash, will be converted into cash, or will be used up within one year from the balance sheet date (oroperating cycle, if longer).
Current assets
includes revenues, expenses, gains, and losses directly related to the primary revenue-generating activities of the company.
Operating income
T/F Is a dollar today worth more than in the future?
True
What is the first step of Revenue Recognition?
Identifying the contract
Name the J/E: Purchase of supplies on account; 60,000
Dr. Cash
Cr. A/P
T/F, Notes Receivable is always a Long Term Asset
False
Revenues = 90,000; Expenses = 60,000; Net Income = ???
30,000
What is it called when payments occur at the beginning of each period?
Annuity due
What is the 2nd step of revenue recognition?
Identify the performance obligations
Paid salaries for the first half of the month; 40,000
Dr. Salaries Exp.
Cr. Cash
provides a biased but informed perspective of a company’s operations, liquidity, and capital resources.
Management's discussion and analysis (MD&A)
equals total net income (less any dividends to preferred shareholders) divided by the weighted-average number of common shares outstanding.
Basic EPS
N=9; I=8; PV=10,000; FV=???
19,990.05
What is the third step of revenue recognition?
Determine the transaction price
This assumption assumes that in the absence of information to the contrary, it is anticipated that a business will operate indefinitely.
Going concern assumption
Net Income = 50,000; Income Tax Expense = 10,000; Interest Expense = 25,000; What is TIE Ratio?
3.4
Name one of the three accounting changes
Prospective, Modified Retrospective, Retrospective
An investment of $10,000 grows to $28,000 over 12 years. What is the annual percentage rate (APR) if interest is compounded semiannually?
8.76%
What is the fourth step of revenue recognition?
Allocate the transaction price to performance obligations
This private-sector organization establishes U.S. accounting standards for financial reporting.
FASB
Name the definition: costs of assets acquired in one period and expensed in a future period
Prepaid expenses
represents total nonowner changes in shareholders’ equity for the period; equal to net income plus other comprehensive income.
Comprehensive income
You put in $500 in at the beginning of each year for 20 years. What is the value today if APR=7%?
$4,682.46
What is the final step of Revenue Recognition?
Recognizing revenue