ACC 201 Test- Study Terms and Questions 100%
Correctly Answered
Short-term Investment - Answer Are securities held by a company that are readily
marketable and intended to be converted into cash within the next year or operatin
cycle, whichever is longer
Readily Marketable - Answer An investment is readily marketable when it can be sold
easily whenever the need for cash arises
Management's Intent to Convert - Answer Management intends to sell the investment
within the next year or operating cycle, whichever is longer
Long-term Investment - Answer - investments in stocks and bonds that are held for
more than one year
- long term assets (land, buildings) that a company isn't currently using in its operating
activities
- long-term notes recievable
Accumulated Depreciation - Answer Shows the total amount of depreciation that the
company has expensed thus far in the asset's life
Intangible Assets - Answer Assets that do not have phsyical substance and often are very
valuable
Example: goodwill, patents, copyrights, trademarks
, Current Liabilities - Answer Obligation that is due within one year or operating cycle,
whichever is longer. And is settled by the use of a current asset providing a sales or
service or creation of another liability
Long-term Liabilities - Answer Obligations that a company expects to pay after one year
Historical Cost Principle - Answer Assets are recorded and reported at original purchase
price
Fair Value Principle - Answer The price recieved to sell an asset or settle a liability
Property, Plant and Equipment accounts are reported on the balance sheet as
_____________________. - Answer Historical Cost
What do earnings per share measure? - Answer - Measures the net income earned on
each share of common stock.
- Only required to be presented by a publicly traded company.
- Must be shown on the bottom of the income statement.
(Net Income - Preferred Dividends)/ Average Common Shares Outstanding
Solvency - Answer Companies ability to pay interest or debt. The higher it gets, the
riskier.
Working Capital - Answer Current Assets - Current Liabilities
- Don't compare to other companies.
Correctly Answered
Short-term Investment - Answer Are securities held by a company that are readily
marketable and intended to be converted into cash within the next year or operatin
cycle, whichever is longer
Readily Marketable - Answer An investment is readily marketable when it can be sold
easily whenever the need for cash arises
Management's Intent to Convert - Answer Management intends to sell the investment
within the next year or operating cycle, whichever is longer
Long-term Investment - Answer - investments in stocks and bonds that are held for
more than one year
- long term assets (land, buildings) that a company isn't currently using in its operating
activities
- long-term notes recievable
Accumulated Depreciation - Answer Shows the total amount of depreciation that the
company has expensed thus far in the asset's life
Intangible Assets - Answer Assets that do not have phsyical substance and often are very
valuable
Example: goodwill, patents, copyrights, trademarks
, Current Liabilities - Answer Obligation that is due within one year or operating cycle,
whichever is longer. And is settled by the use of a current asset providing a sales or
service or creation of another liability
Long-term Liabilities - Answer Obligations that a company expects to pay after one year
Historical Cost Principle - Answer Assets are recorded and reported at original purchase
price
Fair Value Principle - Answer The price recieved to sell an asset or settle a liability
Property, Plant and Equipment accounts are reported on the balance sheet as
_____________________. - Answer Historical Cost
What do earnings per share measure? - Answer - Measures the net income earned on
each share of common stock.
- Only required to be presented by a publicly traded company.
- Must be shown on the bottom of the income statement.
(Net Income - Preferred Dividends)/ Average Common Shares Outstanding
Solvency - Answer Companies ability to pay interest or debt. The higher it gets, the
riskier.
Working Capital - Answer Current Assets - Current Liabilities
- Don't compare to other companies.
