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ACG 2021 Exam 3 Latest Updated
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ACG 2021 Exam 3 Latest Updated
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ACG 2021 Exam 3 Latest UpdatedAccounts payable turnover - ANS--important measure of liquidity
-measures number of times a year a company is able to pay its accounts payable
Accounts payable turnover = purchases from suppliers on credit/ average accounts
payable
Turnover expressed in days = 365/ accounts payable turnover
Additional Paid in Capital - ANS--the difference between the market value and par value
of the stock
Authorized stock - ANS-maximum number of shares the company can issue under its
charter
Book value equation - ANS-Gain/Loss = Cash Received - Book Value
Capital lease criteria - ANS-if lease meets any of these four the it is a capital lease:
-transfer of title at end of lease
-bargain purchase option
-lease term > 75% of useful life
-present value of lease payments >90% of fair value of asset
Carrying value of bond payable - ANS-Discount = maturity value - unamortized discount
Premium = maturity value + unamortized premium
Contigent liabilities - ANS--potential liabilities that depends on future outcome of past
events
-we're going to record the liability if the loss is probable and estimable
Current cash equivalent cost - ANS--the amount that you would have to pay back today
-liabilities are recorded at the current cash equivalent cost
Direct vs indirect method - ANS--companies can choose between the direct and indirect
method for the operating activities section but the direct method is always used for he
investing and financing sections
Dividend declaration date - ANS-Retained earnings xx
Dividends payable xx
-when a company declares that a dividend will be paid
, Dividend payment date - ANS-Dividends payable xx
Cash xx
-when a company pays the dividend amount
Dividends on preferred stock - ANS--stated as a percent of par value or a dollar amount
per share
-may be cumulative:
-passed dividends are owed to preferred shareholders (in arrears)
Preferred stock $1.00 par, 6%, 90,000 shares issued and outstanding
$1.00 * 6% * 90,000 shares = $5,400
Financing activities - ANS-the cash activities that obtain cash from investors and
creditors needed to launch and sustain the business
-primarily affects liabilities and stockholder's equity
Inflows:
-cash received from the sale of the company's stock
-cash received from notes payable
-cash received from issuing bonds payable
Outflows:
-cash paid for the repurchase of the company's own stock
-repayment of principal on notes payable
-cash paid on maturity date of bonds payable
-cash paid for dividends
Investing activities - ANS-the cash activities that increase or decrease the long-term
assets available to the company
-primarily affects long-term assets
Inflows:
-cash received from the sale of long-term assets
-cash received from the sale or maturity of investments
Outflows:
-cash paid for the purchase of long term assets
-cash paid for the purchase of investments
Issued stock - ANS-number of shares the corporation has issued at any given time
Leases - ANS-Operating lease:
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