Becker - FAR F2 Flashcards

Total Cost to Date / Total Estimated Cost of Contract

When revenue is recognized over time, the percentage of completion is calculated as:

Market Participants

Buyers and sellers acting in their economic best interests who are independent (not related parties), who are knowledgeable about an asset or liability, and are willing and able to transact for that asset or liability

Market Approach

Uses prices and relevant information from identical or comparable assets in active markets

Income Approach

Estimates fair value based on present value of future cash flows the asset is expected to generate

Cost Approach

Estimates the amount needed to replace the service capacity of an asset (like a building or machine), adjusted for depreciation

Issued Shares

Shares that have actually been sold to investors (includes both outstanding and treasury)

Outstanding Shares

Shares that are currently held by shareholders

Authorized Shares

Max shares a company can legally issue (per the charter)

500,000

If there are 1,000,000 authorized shares, 600,000 issued shares, and 100,000 treasury shares, how many outstanding shares are there?

Cumulative Preferred Stock

A type of preferred stock where if the company doesn’t pay dividends in any given year, those unpaid dividends accumulate (or "pile up"). The company must pay all those accumulated dividends to the preferred shareholders before it can pay any dividends to common shareholders.

Dividends in Arrears

Dividends on cumulative preferred stock that the company should have paid in previous years but didn’t. These unpaid dividends accumulate and must be paid to preferred shareholders before any dividends can be paid to common shareholders.

False

Exercising stock warrants does have an effect on net income.

True or False?