ACCT 209: EXAM 3
36 Cards in this Set
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Long Term Asset
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Fixed asset, also known as a non-current asset or as property, plant, and equipment (PP&E)
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Natural Resource
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Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form.
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Intangible Asset
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Intangible assets cannot be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset.
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Goodwill
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the fact that an ongoing business had some "prudent value" beyond its assets, such as the reputation the firm enjoyed with its clients.
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Depreciation Expense
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An asset has been used (depreciated) and is then recorded as an expense
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Accumulated Depreciation
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The amount of depreciation an asset collects over time.
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Book Value
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The value of an asset after depreciation as been subtracted.
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Capital Expenditure
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Expenses that improve, extend the life of, or make an asset more efficient. Amout added to the value of the asset
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Revenue Expenditure
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Regular maintenance and repairs that keep that asset in good working order. Recorded as an expense.
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Depletion Expense
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Depreciation expense for a natural resource.
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Amortization Expense
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Depreciation expense for intangible assets.
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Bad Debts Expense
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The amount of noncollectable accounts receiveable for a given period.
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Allowance for Bad Debts
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Money reserved to reduce accounts receiveable due to bad debts.
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Internal Control
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A process effected by an organization's structure designed to help the organization accomplish specific goals or objectives.
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Bank Reconciliation
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The process of comparing and matching figures from the accounting records against those shown on a bank statement.
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Simple Interest
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Interest calculated based on the balance of the principle.
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Principal
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Original amount of a bond or loan.
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Maturity Value
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Amount of bond at maturity including interest.
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Compound Interest
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Interest is added to the principal, so that from that moment on, the interest that has been added also itself earns interest.
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Present Value
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Present value is the value on a given date of a future payment or series of future payments
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Annuity
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Any terminating stream of fixed payments over a specified period of time.
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Bonds Payable
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Bonds Payable
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Serial Bond
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Serial bonds are financial bonds that mature in installments over a period of time.
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Term Bond
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Bonds that mature at one time.
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Debentures
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Unsecured debt backed only by the integrity of the borrower, not by collateral, and documented by an agreement called an indenture. One example is an unsecured bond.
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Convertible bonds
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Lender may exchange bond for company stock.
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Callable Bonds
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redeeming the bond at some point before the bond reaches the date of maturity.
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Bond Discount
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Market rate > stated rate
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Bond Premium
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Market rate < stated rate
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Market Interest Rate
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The current rate of interest that exists when a debt is incurred
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Stated Interest Rate
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amount of cash interest that bond will pay over life of bond issue.
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Straight Line Depreciation
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(Cost-Salvage Value) / (life of the asset)
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Units of Activity
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(Cost - Salvage Value) / (Life of asset in units)
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Double Declining Depreciation
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(2/Life of asset) * Book value
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Present Value
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(Future value) / (1 + interest rate)^(number of periods of compounding)
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Definition
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Definition
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ACCT 209: EXAM 1