The Financial Statements quiz #4 Flashcards
The Financial Statements quiz #4
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What is the meaning of 'customer deposits'?
'Customer deposits' are liabilities representing cash received from customers to be applied to future goods or services. What is the meaning of 'advances from customers'?
'Advances from customers' are liabilities for payments received before delivering goods or services. What is the meaning of 'income summary'?
'Income summary' is a temporary account used to close revenue and expense accounts at the end of a period. What is the meaning of 'dividends declared'?
'Dividends declared' is the amount of dividends a company's board has approved to pay to shareholders. What is the meaning of 'stock dividend'?
'Stock dividend' is a distribution of additional shares to shareholders instead of cash. What is the meaning of 'stock split'?
'Stock split' is an increase in the number of shares outstanding by issuing more shares to current shareholders. What is the meaning of 'par value' of stock?
'Par value' is the nominal value assigned to shares of stock in the corporate charter. What is the meaning of 'stated value' of stock?
'Stated value' is an arbitrary value assigned to no-par stock by the board of directors. What is the meaning of 'capital in excess of par'?
'Capital in excess of par' is the amount received from shareholders above the par value of stock. What is the meaning of 'dividends in arrears'?
'Dividends in arrears' are unpaid dividends on cumulative preferred stock. What is the meaning of 'cumulative preferred stock'?
'Cumulative preferred stock' is preferred stock that accumulates unpaid dividends for future payment. What is the meaning of 'noncumulative preferred stock'?
'Noncumulative preferred stock' is preferred stock that does not accumulate unpaid dividends. What is the meaning of 'callable preferred stock'?
'Callable preferred stock' is preferred stock that can be redeemed by the issuing company at a set price. What is the meaning of 'convertible preferred stock'?
'Convertible preferred stock' is preferred stock that can be converted into common stock at the holder's option. What is the meaning of 'authorized shares'?
'Authorized shares' are the maximum number of shares a corporation is allowed to issue as stated in its charter. What is the meaning of 'issued shares'?
'Issued shares' are the total number of shares that have been sold to shareholders. What is the meaning of 'outstanding shares'?
'Outstanding shares' are the number of shares currently held by shareholders, excluding treasury stock. What is the meaning of 'book value per share'?
'Book value per share' is the equity available to common shareholders divided by the number of outstanding shares. What is the meaning of 'market value per share'?
'Market value per share' is the current price at which a share can be bought or sold in the market. What is the meaning of 'dividend yield'?
'Dividend yield' is the annual dividend per share divided by the market price per share. What is the meaning of 'earnings per share (EPS)'?
'Earnings per share (EPS)' is net income divided by the weighted average number of shares outstanding. What is the meaning of 'price-earnings (P/E) ratio'?
'Price-earnings (P/E) ratio' is the market price per share divided by earnings per share. What is the meaning of 'return on equity (ROE)'?
'Return on equity (ROE)' is net income divided by average stockholders' equity. What is the meaning of 'working capital'?
'Working capital' is current assets minus current liabilities. What is the meaning of 'current ratio'?
'Current ratio' is current assets divided by current liabilities. What is the meaning of 'quick ratio'?
'Quick ratio' is (current assets minus inventory) divided by current liabilities. What is the meaning of 'debt-to-equity ratio'?
'Debt-to-equity ratio' is total liabilities divided by total equity. What is the meaning of 'gross profit'?
'Gross profit' is sales revenue minus cost of goods sold. What is the meaning of 'operating income'?
'Operating income' is gross profit minus operating expenses. What is the meaning of 'net sales'?
'Net sales' is total sales minus sales returns, allowances, and discounts. What is the meaning of 'operating expenses'?
'Operating expenses' are costs incurred in the normal course of business, excluding cost of goods sold. What is the meaning of 'non-operating income'?
'Non-operating income' is income from sources not related to the main business activities. What is the meaning of 'comprehensive income'?
'Comprehensive income' is all changes in equity during a period except those resulting from investments by and distributions to owners. What is the meaning of 'other comprehensive income'?
'Other comprehensive income' includes revenues, expenses, gains, and losses excluded from net income. What is the meaning of 'fiscal year'?
'Fiscal year' is a 12-month period used for financial reporting, which may or may not coincide with the calendar year. What is the meaning of 'interim financial statements'?
'Interim financial statements' are financial statements covering periods of less than one year. What is the meaning of 'comparative financial statements'?
'Comparative financial statements' present financial data for two or more periods side by side. What is the meaning of 'classified balance sheet'?
'Classified balance sheet' organizes assets and liabilities into current and long-term categories. What is the meaning of 'multi-step income statement'?
'Multi-step income statement' separates operating and non-operating activities and shows gross profit, operating income, and net income. What is the meaning of 'single-step income statement'?
'Single-step income statement' groups all revenues together and all expenses together, then subtracts total expenses from total revenues.
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