Match Each Term with the Appropriate Definition

question 6

Multiple Choice

Match each term with the appropriate definition.Not all definitions will be used.
-EPS

• A)Stock shares that pay a fixed dividend rate but have no voting rights.
• B)The shares of stock held by stockholders.
• C)Stock that allows owners to be listed among creditors.
• D)This payment raises stockholders' equity.
• E)This payment decreases stockholders' equity.
• F)The shares of stock held by the issuing company.
• G)Earnings per share that reflects treasury and preferred stock.
• H)(Net income less preferred dividends)divided by average stockholders' equity.
• I)This dividend does not reduce stockholders' equity.
• J)Stockholders' entitlement to remaining assets after creditors are repaid.
• K)The additional shares of stock a company can issue beyond what are already issued.
• L)(Net income less preferred dividends)divided by the average number of outstanding common shares.
• M)When a company first starts selling stock to the public.

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Definitions:

Cash Equivalents

Short-term, highly liquid investments that are readily convertible to known amounts of cash and so close to their maturity that they present insignificant risk of changes in value due to changes in interest rates.

Net Change

Net Change refers to the difference in a financial instrument's closing price between two consecutive trading sessions.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Income Recognition

The accounting principle that revenue should only be recognized after the business has fulfilled its obligations and the payment is certain.