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• Bearer (coupon) bonds


  Bonds not registered.
• Bond certificate


  A legal document that indicates the name of the issuer, the face value of the bonds, and such other data as the contractual interest rate and maturity date of the bonds.
• Bond discount


  The amount by which a bond sells at less than its face value.
• Bond indenture


  A legal document that sets forth the terms of the bond issue.
• Bond premium


  The amount by which a bond sells above its face value.
• Bonds


  A form of interest-bearing notes payable issued by corporations, universities, and governmental entities.
• Callable bonds


  Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer.
• Contractual interest rate


  Rate used to determine the amount of interest the borrower pays and the investor receives.
• Convertible bonds


  Bonds that permit bondholders to convert them into common stock at their option.
• Current liabilities


  Debts that a company reasonably expects to pay from existing current assets within the next year or operating cycle.
• Current ratio


  A measure of a company's liquidity; computed as current assets divided by current liabilities.
• Debenture bonds


  Bonds issued against the general credit of the borrower. Also called unsecured bonds.
• Debt to total assets ratio


  A solvency measure that indicates the percentage of total assets provided by creditors; computed as total debt divided by total assets.
• Face value


  Amount of principal the issuer must pay at the maturity date of the bond.
• Long-term liabilities


  Obligations expected to be paid after one year.
• Market interest rate


  The rate investors demand for loaning funds to the corporation.
• Mortgage bond


  A bond secured by real estate.
• Mortgage note payable


  A long-term note secured by a mortgage that pledges title to specific assets as security for a loan.
• Notes payable


  Obligations in the form of written promissory notes.
• Registered bonds


  Bonds issued in the name of the owner.
• Secured bonds


  Bonds that have specific assets of the issuer pledged as collateral.
• Serial bonds


  Bonds that mature in installments.
• Sinking fund bonds


  Bonds secured by specific assets set aside to retire them.
• Term bonds


  Bonds that mature at a single specified future date.
• Times interest earned ratio


  A solvency measure that indicates a company's ability to meet interest payments; computed by dividing income before income taxes and interest expense by interest expense.
• Unsecured bonds


  Bonds issued against the general credit of the borrower. Also called debenture bonds.
• Working capital


  A measure of a company's liquidity; computed as current assets minus current liabilities.
• Effective-interest method of amortization


  A method of amortizing bond discount or bond premium that results in periodic interest expense equal to a constant percentage of the carrying value of the bonds.
• Straight-line method of amortization


  A method of amortizing bond discount or bond premium that results in allocating the same amount to interest expense in each interest period.
• Which of the following is a disadvantage of the corporate form of the business entity?

  Double taxation
• What effect occurs when a stock split is declared?

  The par Value decreases and the number of shares increases
• What occurs to stockholders equity when a company incurs a net loss for the current period?

  Total retained earnings is reduced before reporting the ending balance of the BS.
• Which of the following is a correct statement concerning the reporting of stockholders equity on the BS?

  The paid-in capital section includes capital stock and additional paid-in capital.
• Stockholders of a corporation directly elect

  board of directors
• The par value of a stock


  Is legally significant
• The amount of stock that may be issued according to the corporation's character is referred to as the

  Authorized stock
• A corporation records a dividend-related liability

  On the declaration date
• Regular dividends are declared out of


  retained earnings
• Big Town Retailers operates in FL and collects sales taxes from customers on all purchases. How should these sales taxes be reported when collected?

  As a current liability until paid to the state of FL
• Which of the following amounts are deducted from employees paychecks?


  Federal income Taxes payable and FICA Taxed payable