Wgu c214 stuvia - Study guides, Class notes & Summaries

Accrual Accounting - ANSWER-Accounting system based on recording accounts based on historical prices and the matching principle Matching Principle - ANSWER-Accrual accounting principle to match revenues and expenses in the same period Historical cost principle - ANSWER-Accrual accounting principle to recorded assets, liabilities, and equity at historical levels. When an asset is purchased or liability incurred, it is recorded at cost. Accumulated depreciation - ANSWER-The total amount o...

Characteristics of preferred stock includes - ANSWER--dividends in arrears -dividends are cumulative -higher payoff claim in a BK (has first dibs in a BK) -considered "hybrid" (part stock/part bond) -no fixed maturity date -no voting rights -can skip dividend payments -dividends don't change year-after-year -used in start ups (IPO) Preferred stock dividends - ANSWER-can go without payment and pay in arrears the following year Characteristics of common stock are - ANSWER--voting ...

How can a private firm appropriately maximize shareholder value? - ANSWER-By making decisions that keep the control of the business with the owners Why are American regulators focused on international investing in a global marketplace? - ANSWER-Because international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? - ANSWER-Bonds and Stocks If a company outsources the manufacturing of its products to a fo...

Trading on the NYSE is executed without a specialist T or F - ANSWER-False What are 2 types of financial instruments - ANSWER-Stocks and BondsM When revenue is matched with cost of sales in an income statement it is called? - ANSWER-matching principle A high quality customer just purchased $500,000 worth of product from your company. The contract calls for immediate delivery of this product with a cash payment of $300,000 today and $200,000 in the next 60 days. The expense associated wi...

Net Income = - ANSWER-Revenues - Expenses Revenues - Cost of Goods Sold (COGS) - ANSWER-Gross Profit Gross Profit - Operating Expenses - ANSWER-EBIT EBIT = - ANSWER-Sales - Costs - Depreciation EBIT = - ANSWER-Operating Profit or Operating Income EBIT - Interest Expense = - ANSWER-Earnings Before Taxes Earnings before Taxes - Tax Expense = - ANSWER-Net Income (NI) Retained Earnings - ANSWER-End RE = Beg RE + NI - Dividends END RE = - ANSWER-Beg RE + (Sales Revenue X Margi...

How can a private firm appropriately maximize shareholder value? - ANSWER-By making decisions that keep the control of the business with the owners Why are American regulators focused on international investing in a global marketplace? - ANSWER-Because international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? - ANSWER-Bonds What are the likeliest outcomes if a company outsources the manufacturing of ...

How can a private firm appropriately maximize shareholder value? - ANSWER-By making decisions that keep the control of the business with the owners Why are American regulators focused on international investing in a global marketplace? - ANSWER-Because international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? - ANSWER-Bonds If a company outsources the manufacturing of its products to a foreign count...

If accounts receivable increases, what is the impact on CFO? - ANSWER-CFO decreases Are actual taxes paid the same as how on the GAAP income statement? - ANSWER-No. Actual Taxes = IRS Rules Income Statement = GAAP Which decisions require using subjective estimates? - ANSWER-Economic life of a new asset. If there is a 30% change of a recession, what is the probability of expansion? - ANSWER-70% *The sum of probabilities must equal 100% How much interest is paid on a 6% bond ove...

What standards are used to help US investors understand and compare foreign financial statements to domestic financial statements? - ANSWER-International Financial Reporting Standards When a company is optimizing its resources and maintaining or improving productivity, they are engaging in what hypothesis - ANSWER-Efficient Market Hypothesis What is the basic type of negotiable debt? - ANSWER-Bonds What is the characteristic of a stock sold in the secondary markets? - ANSWER-Stocks sold...

Discretionary Financing Needed Formula - Answer Discretionary Financing Needed (DFN) = Projected Total Asset - Projected Total Liabilities - Projected Equity Sustainable Growth Rate Formula - Answer Sustainable Growth Rate (SGR) = Return on Equity (ROE) X (1-Divided Payout Ratio) Cash Flow from Operating Activities (CFO) Formula - Answer Cash Flow from Operating Activities (CFO) = Net Income + Depreciation +/- Decreases/Increases in Current Assets +/- Increase/Decrease in Current Liabiliti...