accounting exam 3

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22 Terms

1
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fixed asset

used for use over one or more years

2
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tangible asset

type of fixed asset physical substance; property, plant, equipment

3
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intangible asset

type of fixed asset, special rights but no physical substance; existence is indicated only by legal documents

4
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when to capatilize

extraordinary maintence that extends useful life of plant assets

5
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when to expense

ordinary repairs and ordinary, ongoing expenditures

6
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expense defintion

debit to account in period incurred

7
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capitalizing

add to asset account and depreciate

8
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fixed asset ratio

net revenue/average net fixed assets

9
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fixed asset definition

cent of dollar sales a company generates for each dollar invested in assets, larger the betterA measure of how effectively a company utilizes its fixed assets to generate sales.

10
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current portion of long term debt

classified as a current liability, on balance sheet

11
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times interest earned ratio

net income+int exp+tax exp/interest expense

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times interest earned ratio definition

measures a company's ability to meet its debt obligations by comparing its earnings to interest expenses.

13
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debts to assets ratio

liabilities/assets

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debts to assets ratio definiton

indicates the proportion of a company's assets that are financed by debt, helping assess financial leverage. It is calculated by dividing total liabilities by total assets.

15
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stockholder benefits

voting rights, dividends, residual claims, preemptive rights

16
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authorized stock

the amount of stock a company is authroized to selli

17
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ssued stock

number of shares sold

18
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outstanding stock

stock thatā€™s still in the hands of shareholders

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treasury stock

stock was repurchased by the company

20
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operating actvities

expenses or revenues that impact net income

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investing actvities

sale of investments, fixed assets, lendin gmoney, and collecting paymentsfi

22
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financing

SHE transactions, issuing bonds payables, repaying bonds payables, repaying long term debt