Depreciation
When recording depreciation Expense, what other account is affected?
Accumulated Depreciation
What is Outstanding Stock?
What is Treasury Stock?
Stock that outside shareholders own.
Stock that the company owns.
What are the three methods of depreciation?
Straight-Line
Units-of-Production
Double Declining Balance
A bond is released with a 2% higher interest rate than the current market rate. What are the bonds issued at?
A Premium.
T/F
Investors trading stock with one another affect the company directly.
False
Note Receivable vs Note Payable?
Receivable is when the company is owed money from lending.
Payable is when the company owes money from borrowing.
What is the Debt to Asset ratio?
Total Liabilities / Total Assets
T/F
All costs incurred to acquire Equipment are not included in the cost.
False
A bond is issued at stated rate of 5% and the current market rate is 7%. What are the bonds issued at ?
A Discount
What is recorded when stock is bought back from shareholders?
Treasury stock (Debit)
How is interest calculated?
Principal x Rate x Time = Interest
How is Return on Equity calculated?
Net Income / Average Shareholders Equity
How is the straight-line method calculated?
(Cost - Residual Value) x 1 / useful life
What is recorded when Treasury stock is sold for less than what the company paid?
A Debit to Additional Paid in Capital
A company issued 2,000 shares for $5 each with a par value of $0.01. What is the Additional Paid in Capital?
What is the total contributed capital?
$9,980 = APIC
$10,000 = Contributed Capital
T/F
Interest on debt is tax deductible
True
How is Earnings per Share calculated?
Net Income / Average Shares
How is the Double Declining Balance calculated?
(Cost - Accumulated Depreciation) x 2 / Useful Life
A company issued a $50,000 bond at face value. What is recorded?
Debit to Cash 50,000
Credit to Bonds Payable 50,000
When declaring a cash dividend, what accounts are affected on the date of record?
None.
A company signs a note payable for $20,000 with an interest rate of 6% and maturity date of 2 years. What is the Expense for the first 6 months of Interest?
20,000 x .06 x 6/12 = 600
How is Price-to-Earnings Calculated?
Share Price / Earnings per Share