CSUF ACCT 201A – Hatton Questions &
Answers
long-term investments Correct Ans-an account on the asset side of a company's balance sheet
that represents the company's investments, including stocks, bonds, real estate and cash, that it
intends to hold for more than a year.
NSF check Correct Ans-a check that is not paid by a bank because of insufficient funds in a
bank account
operating activities Correct Ans-cash flow activities that include the cash effects of
transactions that create revenues and expenses and thus enter into the determination of net
income
outstanding checks Correct Ans-checks issued and recorded by a company that have not been
paid by the bank
periodic inventory system Correct Ans-an inventory system in which a company does not
maintain detailed records of goods on hand throughout the period and determines the COGS only
at the end of an accounting period
perpetual inventory system Correct Ans-a detailed inventory system in which a company
maintains the cost of each inventory item, and the records continuously show the inventory that
should be on hand
, premiums Correct Ans-the difference between the selling price and the face value of a bond
when a bond is sold for more than its face value
property, plant, and equipment Correct Ans-assets with relatively long useful lives that are
currently used in operating a business
revenue Correct Ans-the increase in assets or decrease in liabilities resulting from the sale of
goods or the performance of services in the normal course of business
revenue recognition principle Correct Ans-the principle that companies recognize revenue in
the accounting period in which the performance obligation is satisfied
sole proprietorship Correct Ans-a business owned by one person
market rate Correct Ans-the rate investors demand for loaning funds to a corporation
contractual rate (coupon rate) Correct Ans-rate used to determine the amount of interest the
borrower pays and the investor receives
cash flow statement Correct Ans-a basic financial statement that provides info about cash
receipts and payments of an entity during a period classified as operating, investing, and
financing activities in a formation that reconciles the beginning and ending cash balance
Answers
long-term investments Correct Ans-an account on the asset side of a company's balance sheet
that represents the company's investments, including stocks, bonds, real estate and cash, that it
intends to hold for more than a year.
NSF check Correct Ans-a check that is not paid by a bank because of insufficient funds in a
bank account
operating activities Correct Ans-cash flow activities that include the cash effects of
transactions that create revenues and expenses and thus enter into the determination of net
income
outstanding checks Correct Ans-checks issued and recorded by a company that have not been
paid by the bank
periodic inventory system Correct Ans-an inventory system in which a company does not
maintain detailed records of goods on hand throughout the period and determines the COGS only
at the end of an accounting period
perpetual inventory system Correct Ans-a detailed inventory system in which a company
maintains the cost of each inventory item, and the records continuously show the inventory that
should be on hand
, premiums Correct Ans-the difference between the selling price and the face value of a bond
when a bond is sold for more than its face value
property, plant, and equipment Correct Ans-assets with relatively long useful lives that are
currently used in operating a business
revenue Correct Ans-the increase in assets or decrease in liabilities resulting from the sale of
goods or the performance of services in the normal course of business
revenue recognition principle Correct Ans-the principle that companies recognize revenue in
the accounting period in which the performance obligation is satisfied
sole proprietorship Correct Ans-a business owned by one person
market rate Correct Ans-the rate investors demand for loaning funds to a corporation
contractual rate (coupon rate) Correct Ans-rate used to determine the amount of interest the
borrower pays and the investor receives
cash flow statement Correct Ans-a basic financial statement that provides info about cash
receipts and payments of an entity during a period classified as operating, investing, and
financing activities in a formation that reconciles the beginning and ending cash balance
