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University of Central Florida
Accounting General
ACG 2021
Steven Neel

Chapter 8 Commercial paper: Borrowing from another company rather than from a bank Contingencies: Uncertain situations that can result in a gain or a loss for a company. Contingent liability: An existing uncertain situation that might result in a loss Current liabilities: Debts that, in most cases, are due within one year. However, when a company has an operating cycle of longer than a year, its current liabilities are defined by the length of the operating cycle, rather than by the length of one year. Current portion of long-term debt: Debt that will be paid within the next year. Liability: A present responsibility to sacrifice assets in the future due to a transaction or other event that happened in the past. Line of credit: An informal agreement that permits a company to borrow up to a prearranged limit without having to follow formal loan procedures and prepare paperwork. Notes payable: Written promises to repay amounts borrowed plus interest Sales tax payable: Sales tax collected from customers by the seller, representing current liabilities payable to the government. Unearned revenue: A liability account used to record cash received in advance of the sale or service Chapter 9 Amortization schedule: Provides a summary of the cash interest payments, interest expense, and changes in carrying value for debt instruments. Bond: A formal debt instrument that obligates the borrower to repay a stated amount, referred to as the principal or face amount, at a specified maturity date. Bond indenture: A contract between a firm issuing bonds and the corporations or individuals who purchase the bonds. Callable: A bond feature that allows the borrower to repay the bonds before their scheduled maturity date at a specified call price. Capital lease:: Contract in which the lessee essentially buys an asset and borrows the money through a lease to pay for the asset Capital structure: The mixture of liabilities and stockholders' equity in a business. Carrying value: The balance in the bonds payable account, which equals the face value of bonds payable minus the discount or the face value plus the premium Convertible: A bond feature that allows the lender (or investor) to convert each bond into a specified number of shares of common stock. Debt financing: Obtaining additional funding from lenders. Early extinguishment of debt: The issuer retires debt before its scheduled maturity date Equity financing: Obtaining additional funding from stockholders. Installment payment: Includes both an amount that represents interest and an amount that represents a reduction of the outstanding balance Lease: A contractual arrangement by which the lessor (owner) provides the lessee (user) the right to use an asset for a specified period of time. Market interest rate:: Represents the true interest rate used by investors to value a bond. Operating lease: Contract in which the lessor owns the asset and the lessee simply uses the asset temporarily Private placement: Sale of debt securities directly to a single investor. Secured bonds: Bonds that are supported by specific assets pledged as collateral. Serial bonds: Bonds that require payment of the principal amount of the bond over a series of maturity dates Sinking fund: An investment fund used to set aside money to be used to pay debts as they come due Stated interest rate: The rate quoted in the bond contract used to calculate the cash payments for interest. Term bonds: Bonds that require payment of the full principal amount of the bond at a single maturity date. Unsecured bonds: Bonds that are not supported by specific assets pledged as collateral. Chapter 10 Accumulated deficit: A debit balance in Retained Earnings. Additional paid-in capital: The portion of the cash proceeds above par value Angel investors: Wealthy individuals in the business community willing to risk investment funds on a promising business venture. Articles of incorporation: Describes the nature of the firm's business activities
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