Indiana University Bloomington

capital structure - Answer mixture of debt and equity to finance operations debt - Answer borrowed from creditors equity - Answer invested by owners debt is _______ than equity bc - Answer risker: -debt payments are legal obligations -creditors can force bankruptcy -creditors can require sale of assets liabilities recorded at - Answer current cash equivalent current cash equivalent - Answer cash amount a creditor would accept to settle the liability immediatel...

2 primary functions of financial accounting - Answer 1. measure business activities of a company 2. communicate information about those activities to investors and creditors and other outside users for decision making purposes who has claims to a company's resources? - Answer investors and creditors corporation - Answer company legally separate from its owners - advantage is limited liability from stockholders being held responsible for financial obligations of a company - d...

Revenue Recognition Principle - Answer requires for revenues be recorded when... the company transfers goods and services to customers in the amount the company expects to receive Revenue is recognized when the ____________ ____________ is satisfied - Answer performance obligation Common incentives to motivate customers to buy their products and pay quickly for purchases include... - Answer credit cards, discounts, and returns Unavoidable fee - Answer the fee to use a credit...

In order to provide financial statement users with the most __________ and ___________ information about the firm's assets, liabilities, and therefore equity, US GAAP requires firms to ____________________________ assets and liabilities in the financial statements - Answer Relevant; faithfully represented; use a variety of different approaches to value What are the fundamental qualities of financial reporting? - Answer Financial reporting must be relevant and faithfully represented ...

Which of the following is true? a. Total fixed costs plus total variable costs will always equal total sales b. The contribution margin will always equal fixed costs plus net income c. Variable costs per unit will vary depending on the level of production d. Fixed costs per unit always stay the same - Answer b. The contribution margin will always equal fixed costs plus net income Variable costs expressed on a per unit basis: a. Should be ignored in making decisions since they cannot ...

Which of the following statements are true regarding stockholders? A. They are creditors of the company. B. They are owners of the company. C. They expect to receive interest on their investment. D. They expect to receive their investment back at a specified point in time. - Answer B. They are owners of the company Which of the following is correctly classified? A. Selling stock to stockholders is an investing cash flow. B. Paying for operations of the business is an investing cash f...

Managerial Accounting - Answer accounting used to provide information and analyses to managers inside the organization to assist them in decision making What three categories go into Product Costs? - Answer 1. Direct Materials-raw materials that go directly into the product 2. Direct Labor-all wages and benefits for employees working on the product 3. Manufacturing Overhead-utilities, insurance What are examples of Period Costs? - Answer 1. selling expenses-advertising, marketin...

Debt-to-equity Ratio: Leverage - Answer Average Total Liabilities/Average Stockholders' Equity Return On Equity(ROE)Ratio: Profitability - Answer Net Income/Average Stockholders' Equity Current Ratio: Solvency - Answer Current Assets/Current Liabilities Inventory Turnover Ratio: Asset Turnover - Answer Costs of Goods Sold/Average Inventory Earnings per Share: Other - Answer Net Income/# of shares outstanding -- required to be on financial statements Accounts R...

balance sheet equation - Answer assets = liabilities + equity Assets - Answer what the business owns Assets Rules - Answer 1.) Things the business controls 2.) From a past event 3.) Will generate future economic benefit current assets - Answer assets that will be turned into cash or used up within a year ex. cash, accounts receivable, prepayments long term assets - Answer assets that will be turned into cash or used up within a period longer than a year ex. PPE, tr...

Business activities - Answer Operating, Investing, and Financing Sources of funds - Answer liabilities and stockholders’ equity Uses of funds - Answer assets Equity Investors - Answer Owners/shareholders Care about earnings retained from profitable business operations Legal rights of stockholders - Answer Ownership, hope for profit Benefits of stockholders - Answer Increased value of shares, possible dividends Risks of stockholders - Answer May not recei...

Financial Accounting - Answer The field of accounting that focuses on providing information for external decision makers. Finance Activities - Answer raising money through creditors and investors Operating activities - Answer Paying salaries, wages, rent, utilities, stuff that makes the business operate Investing Activities - Answer Purchasing land, buildings and equipment to operate Equity investors - Answer Shareholders of a company who hope to receive dividends and ...

harmful or offensive touching without consent - Answer battery reasonable apprehension of an immediate threat to physical safety - Answer assault intentional confinement for an appreciable time without consent - Answer false imprisonment substantially restricting a persons freedom of movement - Answer confinement state laws provide an exception to false imprisonment to stop suspected shoplifters on - Answer reasonable belief, manner, and time conduct must be outrage...

offeror - Answer party that makes the proposal (offer) to enter into a contract offeree - Answer the party to whom the proposal (offer) is made unilateral contract - Answer only one party makes a promise... a promise for an act EX: loyalty punch cards. Offeror gives offeree free drink to anyone with X amount of punches. *insurance* bilateral K - Answer Both parties exchange promises. Contract formed as soon as promises are exchanged EX: Lease agreements. Bill agrees t...

Clark's Sales and Service, Inc. V. Smith p465 - Answer Noncomepte agreement overly broad clause and thus unenforceable not split up so court could enforce reasonable provisions Favor of Smtih Banks v Lockart p204 - Answer Battery punitive damages bc sudden act of passion favor of Lockart Durham v Mcdonalds p207 - Answer Intentional Infliction of Emotional Distress Extreme and outrageous, and severe Favor of Durham Farrell v Macy's p210 - Answer False Imprisonmen...

valid contract - Answer a set of promises that the law will enforce, containing agreement, consideration, legality, capacity bilateral contract - Answer a type of contract, two (both) parties make promises and the contract is formed at the time the promises are exchanged unilateral contract - Answer a type of contract, a promise by one party in exchange for performance by the other party (not merely a promise to perform, which would create a bilateral contract) unenforceable co...

trademark - Answer any word, name, symbol, device or combo used by manufacturer/seller to identify and distinguish products from competitors service marks, trademarks, certification and collective marks - Answer types of protected marks 1. fanciful 2. arbitrary 3. suggestive 3. descriptive 4. marks that are not inherently distinctive (require secondary meaning) 5. generic terms - Answer classification of marks by inherent distinctiveness general terms - Answer ineligibl...

Tort - Answer a civil wrong that is not a breach of contract The 4 types of wrongness - Answer intent, recklessness, Negligence, and strict liability Intent - Answer desire to cause a certain consequence Recklessness - Answer conscious indifference to a known and substantial risk of harm created by one's behavior negligence - Answer failure to reasonably care and cause damages as a consequence We all have a duty to act reasonably. If you breach that duty, you are...

3 elements of a contract - Answer 1. Offer 2. Acceptance 3. Consideration 3 elements of an offer - Answer 1. Intent to contract 2. Definiteness 3. communication INTENT - Answer -present intent to contract on part of offeror upon acceptance -Offeror is not joking, haggling, or equivocation -Courts take objective approach of contracts: parties' outward manifestations of intent, words, acts and circumstances signify about intent -Reasonable person would be justified in beli...

Can a local businessman pay a police officer $50 a week to watch the business more closely? a. Yes, as long as the contract is registered with the Secretary of State b. No, Public Officials cannot give consideration on duties they are already supposed to perform c. Yes, as long as 50$ is reasonable amount to watch the business d. Yes, as long as a court reviews the contract within 30 days e. No, unless a court approves the agreement - Answer b. No, Public Officials cannot give considerat...

What is Law? (Introduction to Law) - Answer The rules enforced on us by the government. Laws are most effective when... (2 items) (Introduction to Law) - Answer 1. Written down 2. Accessible by the public Primary Elements of Law (3 items) (Introduction to Law) - Answer 1. Sets forth rules 2. Rules are set forth by the government 3. Enforced by the government Code of Hammurabi (Introduction to Law) - Answer Babylon, 1790 B.C. - Guilt or innocence was de...