Index I-6Quick ratio, 464, 647, 648
Quick response, 281
R
Rate earned on
stockholders’ equity, 636
total assets, 637
Ratio of
cash flow to net income, 327
cash to monthly cash expenses, 328
fixed assets to long-term liabilities, 648
liabilities to stockholders’ equity, 649
total liabilities to total assets, 466
Ratios
acid-test, 464, 648
current, 464, 646, 647
dividend payout, 511, 651
fixed asset turnover, 418
price-earnings, 552, 651
quick, 464, 647, 648
stockholders, 650
“Razor blade” tactic, 504
Receivables, 356
accounts, 356
aging the, 361
classification of, 356
estimate based on analysis of, 361
fraud, 364
notes, 356, 365
number of days’ sales in, 642
on the balance sheet, reporting, 367
other, 357
trade, 356
uncollectible, 357
Reconciliation of net income
and cash flows from operations, 121,
122
with net cash flows from operating
activities, 176, 329
Reconciling items, 123
Remittance advice, 316–317
Repairs
extraordinary, 403
ordinary maintenance and, 403
Report form, 218
Reporting, investment, 548
Residual value, 405
Responsibility reporting, 23
Restructuring charges, 539
Retained earnings, 16, 584
statement, 15, 16, 64, 112, 113, 218
Returns and allowances
purchase, 215, 225
sales, 215, 223
Revenue, 12, 112
cycle, 154
deferred, 459
expenditures, 403
recognition, 22
unearned, 459
Risk assessment, 311
Rules, 54
of debit and credit, 156, 157
S
Sale of land, gain on, 587, 594
Sales, 12, 215
cost of, 12
discounts, 215, 223
estimate based on percent of, 360
net, 212
returns and allowances, 215, 223
transactions, 220
Sales taxes, 228
and transportation costs, 226
Salvage value, 405
Sarbanes-Oxley Act of 2002, 25, 306,
654
Scrap value, 405
Securities
available-for-sale, 544
equity, 544
held-to-maturity, 549
marketable, 544
trading, 544
Securities and Exchange Commission
(SEC), 15, 417
Security measures, proofs and, 313
Selling expenses, 12, 217
Serial bonds, 447
Service, 5
Short-term investments in stocks, 544
Single-step income statement, 217
Social Security, 444
Special charges, 538
Special journal, 157
Special-purpose funds, 325, 326
Specific identification method, 269
State Unemployment Tax Acts. See
SUTA
Stated value, 497
per share, 500
Statement of cash flows, 15, 18, 65,
114, 115, 174, 176, 218, 580
direct method, 591, 596
for merchandising business, 219
Hershey Foods Corporation, 18
indirect method, 234, 584, 591
preparing, 591
Statement of comprehensive income,
545, 546
Statement of stockholders’ equity, 508,
509
Statements of Financial Accounting Stan-
dards, 21
Stock dividend, 507
Stock fraud, 498
Stock issuing of, 499
Stock option, 501
Stock split, 503
Stockholders, 11
Stockholders’ equity, 17, 115
effects of transactions on, 62
on the balance sheet, reporting,
509
rate earned on, 636ratio of liabilities to, 649
reporting, 508
section of the balance sheet, 510
section with treasury stock, 503
Stockholder ratios, 650
Stocks
accounting for investments in, 544
common, 496, 589
cumulative preferred, 498
long-term investments in, 546
no-par, 497, 500
outstanding, 496
preferred, 498
premium on, 499
sale of investments in, 547
short-term investments in, 544
Straight-line method, 406, 455
Subsidiary company, 549
Subsidiary ledger, 221, 222
Supplies, 108
SUTA, 445
tax, 445T
T account, 155
Tax differences between tax return and
income statement, 460
Tax payments, responsibility for, 445
Taxable income, 459
Taxes
employer payroll, 445
FICA, 444, 445
FUTA, 445
recording and paying payroll, 446
SUTA, 445
sales, 226, 228
Temporary accounts, 169
Temporary investments, 544
Term bonds, 447
Trade receivables, 356
Trade-in value, 405
Trademark, 413
Trading securities, 544
Transaction processing system, 153,
154
Transactions, 54
and adjustments, summary of, 111
dual nature of merchandise, 228
purchase, 224
sales, 220
summary of, 61, 67
Transportation costs and sales taxes,
226
Transportation terms, 227
Treasury cycle, 154
Treasury stock, 501, 502
Trial balance, 161, 162, 165
adjusted, 164
post-closing, 171U
U.S. Financial Accounting Standards
Board, 217