Accounting Terminology
Listed Below Are Nine Technical Accounting Terms Introduced

question 61

Essay

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:
$$\begin{array} { | l | l | l | } \hline \text { Postretirement benefits expense } & \text { Deferred income taxes } & \text { Interest coverage ratio } \\\hline \text { Operating lease } & \text { Maturity value } & \text { Loss contingency } \\\hline \text { Capital lease } & \text { Applying leverage } & \text { Estimated liability } \\\hline\end{array}$$
Each of the following statements may (or may not) describe one of these technical terms. In the space provided beside each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
____ (a) Operating income divided by annual interest expense.
____ (b) The amount paid during the current period to retired employees.
____ c) A lease agreement that is viewed as equivalent to the lessee purchasing the leased asset.
____ (d) Using borrowed money to finance business operations.
____ (e) The risk of a loss occurring in a future period.
____ (f) A permanent reduction in the amount of income taxes owed which results from the tax deductions for depreciation.
____ (g) The amount that must be paid to settle a liability at the date it becomes due.

Interpret the liquidity of a company's accounts receivable and its importance.

Describe the electronic means of cash transfer and its relevance in financial operations.

Understand the utility of specific funds and accounts for handling cash operations and discrepancies.

Understand how to initiate and modify queries in a database.

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Definitions:

Conscious Awareness

The state of being cognizant of and capable of recognizing one's own existence, sensations, thoughts, surroundings, etc.

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time.

Cocktail-Party Effect

The ability to focus one's auditory attention on a particular stimulus while filtering out a range of other stimuli.

Sound Shadow

An area where sound waves are obstructed or diminished, often created by obstacles that prevent sound from reaching a listener directly.