Chapter 11
Identify the type of accounting associated with each type of report: Managerial, Financial, Tax, or some combination as needed. (1.) Budget for internal use by management (2.) Tax return for state income taxes (3.) Special reports for regulators of a public utility (4.) Audited financial statements
(1.) Managerial (2.) Tax (3.) Combination as needed. (4.) Financial
Identify each of the following activities as operating (O), investing (I), or financing (F): (1.) Investment of excess cash in the shares of another company (2.) Payment of employee salaries (3.) Issuance of common stock (4.) Repayment of a loan (5.) Sale of merchandise inventory (6.) Purchase of equipment to manufacture a company's products
(1.) investing (2.) operating (3.) financing (4.) financing (5.) operating (6.) investing
Return on common stockholders' equity
(Net income - Preferred stock dividends)/ Average common stockholders' equity
triple bottom line reporting framework
(PPE) Social bottom line "people" Environmental bottom line "planet" Economic bottom line "economy"
U.S. GAAP is universally accepted in all countries in the world. T/F
False
Stock Dividends
Additional shares of a company's own stock are given to stockholders; however, proportionate ownership in the corporation, and therefore their wealth, does not change
Preferred Stock
Dividend preference and Asset distribution preference
Once established, U.S. GAAP is rarely, if ever, modified. T/F
False
accounting measurement process.
Identify relevant economic activity, Quantify economic activity, Record in a systematic fashion.
The international counterpart to the Financial Accounting Standards Board (FASB) is the
International Accounting Standards Board (IASB)
the Financial Accounting Standards Board (FASB)
U.S. GAAP is established by the
reverse stock split
increases the companies par value and reduces the outstanding shares
forward stock split
increases the number of outstanding shares and proportionately reduces the price of the stock.
Common Stock
voting rights, shares in net income, claim on corporate assets in the event of a liquidation, right to purchase new shares to maintain proportionate ownership in the corporation.