Exam (elaborations)
Series 86 Formulas questions and answers verified 2024
- Course
- Institution
Series 86 Formulas questions and answers verified 2024
[Show more]
Content preview
Series 86 FormulasAsset Turnover Ratio - correct answer ✔net sales/average total assets
Inventory Turnover Ratio - correct answer ✔COGS/Average Inventory
Accounts Payable Turnover - correct answer ✔COGS/Average Accounts
Payable
annual depreciation expense - correct answer ✔(cost - salvage value) /
useful life
cost method of accounting - correct answer ✔Used when a company owns a
nominal percentage of another company's outstanding shares
Equity Method of Accounting - correct answer ✔used when a company owns
20-50% of another companys stock. Company A owns 40% of Company B,
and will record it's share of earnings on it's P/L and under other income
Purchase Method - correct answer ✔Record assets and liabilities acquired in
a merge or acquisition at their fair value on the transaction date.
noncontrolling (minority) interest - correct answer ✔The portion of equity (net
assets) interest in a subsidiary not attributable to the parent company.
operating lease - correct answer ✔A contractual agreement allowing one
party (the lessee) to use the asset of another party (the lessor); accounted for
as a rental by the lessee. Does not show up on balance sheet
Show up as an operating expense
, Considered more aggressive than an operating lease
capital lease - correct answer ✔A contractual agreement allowing one party
(the lessee) to use another party's asset (the lessor); accounted for like a
debt-financed purchase by the lessee.
Booked as a fixed asset subject to depreciation
stock split vs stock dividend - correct answer ✔Stock split
-No change in paid-in capital, retained earnings, or common stock
-Decrease in value per share
Stock dividend
-Increase in paid-in capital and common stock
-Decrease in retained earnings
-No change in par value per share
Receivables Turnover Ratio - correct answer ✔Net sales / avg net accounts
receivable
Current Ratio - correct answer ✔Current Assets/Current Liabilities
Working capital ratio - correct answer ✔Net working capital/Sales
Quick or Acid Test Ratio - correct answer ✔(Current Assets - Inventory) /
Current Liabilities
Basic EPS - correct answer ✔(Net Income - Preferred Dividends)/(Weighted
Average of Shares Outstanding)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller LEWISSHAWN55. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77858 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now
