Earnings per Share - ANSWERSNet Income - Preferred Dividends/Weighted-average Common shares outstanding during the year
Earnings Available to Common stockholders - ANSWERSNet Income - Preferred Dividends
Working Capital - ANSWERSCurrent Assets - Current Liabilities
Debt to Assets Ratio - A...
Kimmel, Financial Accounting Exam 1
Questions & Answers
Earnings per Share - ANSWERSNet Income - Preferred Dividends/Weighted-average
Common shares outstanding during the year
Earnings Available to Common stockholders - ANSWERSNet Income - Preferred
Dividends
Working Capital - ANSWERSCurrent Assets - Current Liabilities
Debt to Assets Ratio - ANSWERSTotal Liabilities/ Total Assets
Free Cash Flow - ANSWERSNet Cash Provided by Operating Activities - Capital
Expenditures - Cash Dividends
Comparability - ANSWERSWhen different companies use the same accounting
principles
Verifiability - ANSWERSIndependent observers use the same method and get the same
results
Timeliness - ANSWERSIn order for accounting information to be relevant, it must be
timely
Understandability - ANSWERSPresented in a clear concise fashion
Monetary Unit - ANSWERSRecording all in one currency.
Economic Entity Assumption - ANSWERSEvery Economic entity can be separately
identified and accounted for
Periodicity Assumption - ANSWERSThe life of a business can be divided into separate
time periods and there will be useful reports covering those periods
Going Concern Assumption - ANSWERSthe business will remain in operation for the
foreseeable future
Historical Cost Principle - ANSWERSCompanies record assets at their cost
Fair Value Principle - ANSWERSAssets and Liabilities should be reported at fair value
, Full Disclosure Principle - ANSWERSrequires that companies disclose every event that
would make a difference to financial statement users
Cost Constraint - ANSWERSAccounting standard-setter weigh the cost that companies
will incur to provide the information against the benefit that financial statement users will
gain from having the information available.
Materiality - ANSWERSIf an item is large enough to likely influence the decision of an
investor or creditor
Relevance - ANSWERSThe quality of information and if it would make a difference
Faithful Representation - ANSWERSMeans that information accurately depicts what
really happened. Information that is complete, neutral, and free of error.
Working Capital and Current Ratio - ANSWERSWhat equation(s) do you need to
measure Liquidity?
Debt to Assets Ratio - ANSWERSWhat equation do you need to measure Solvency?
account - ANSWERSan individual accounting record of increases and decreases in
specific asset, liability, stockholders equity, revenue or expense items
accounting Information Systems - ANSWERSthe system of collecting and processing
transaction data and communicating financial information to decision-makers
credit - ANSWERSthe right side of an account
debit - ANSWERSthe left side of an account
double entry system - ANSWERSsystem that records the two sided effect of each
transaction in appropriate accounts. DEBITS must equal CREDITS
general journal - ANSWERSthe most basic form of journal
general ledger - ANSWERSa letter that contains all asset, liability, stockholders equity,
revenue, and expense accounts
Journal - ANSWERSan accounting record in which transactions are initially recorded in
chronological order
journalizing - ANSWERSthe procedure of entering transaction data in the journal
Ledger - ANSWERSthe group of accounts maintained by a company
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