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.