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Accounting
| Question | Answer |
|---|---|
| Face Value/ par value | The principal amount of the bond as stated on the bond cerificate |
| Debenture Bonds | Bonds not backed by specific collateral |
| Collateral | Assets that back bonds in case ussuer cannot make the interest payments |
| Term Bonds | Bonds that mature on the same date |
| Serial bonds | Bonds that mature on various dates |
| Callable Bonds | Bonds that may be retired prior to maturity at option of issuer |
| Face Rate of interest | rate of interest on the bond certificate |
| Market rate of interest | The rate of interest that investors could obtain by investing in other similar bonds |
| Bond Issue price | The present value of interest payments and face value |
| Premium | The excess of issue price over the face value |
| Discount | The excess of face value over the issue price |
| Investing interest method of amortization | process of transfering a portion of the premium or discount to interest expense |
| carrying value | The face value of a bond plus the amount of unamrtized premium or minus the amount of unamortized discount |
| Dept Financing | Financing by borrowing from banks or other creditors |
| Equity Financing | Financing by issuing stock |
| Authorized Shares | The maximum number of shares of stock a corporation may issue as indicated in the corporate charter |
| Issued shares | number of shares distributed to stockholders |
| outstanding shares | number of shares issued less the number of shares held as treasury sock |
| Par value | An arbitrary amount stated on the face of the stock certificate. the legal capital of the corporation |
| Additional paid in capital | the amount receivedfor the issuance of stock in escess of the par value |
| Reatained Earnings | Net income earned but not paid out in dividends |
| Prefered stock | Capital stock that offers a preference to dividends declared. paid before common |
| cumulative feature | feature of prefered stock. right to recieve unpaid dividends from previous years before current dividends are distributed |
| common stock | stock that provides voting rights and rights to dividends after distributed to prefered stockholders |
| Treasury Stock | Capital stock that is repurchased by the issueing firm. |
| Dividends | distribution of net income of a business to its owners |
| stock split | creation of additional shares of stock with a reducation of par value |
| Statement of Stockholders Equity | difference between beginning and ending balances for all accounts in the stockholders equity section of the balance sheet. Replaces statement of RE |
| Dividened payout ratio | The annual Dividend amount divided by the annual net income |
| Market Value Per share | The selling price of the stock as indicated by the most recent transaction |
| Cash Equivalent | An item readily convertible to a known amount of cash and with a maturity to the investor of three months or less. |
| operating activities | acquisition and sale of products and services; collection of customer accounts, payments to suppliers, payments of wages |
| Investing activities | acquisition and disposal of long-term assets; Purchase or sale of plant and equipment |
| Financing activities | raising and repayment of funds in the form of long-term debt and equity; Issuance and repayment of capital stock and bonds |
| Direct method | for operating activities section of Statement of CF. Cash receipts and Cash payments are recorded |
| Indirect Method | for operating activities section of Statement of CF. net income is reconciled to net cash flow from operations |
| Noncash Investing and Financing Activities | Important investing and financing activities that do not affect cash. |
| dept/equity ratio | measure to help bankers with company's ability to meet its principal and interest obligations |
| Relative Value | A measure of the relative worth of investment in a company. Stock market price per share to the companies earnings per share |
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