Accounting Terminology
Listed Below Are Nine Technical Accounting Terms Introduced

question 109

Essay

Accounting terminology
Listed below are nine technical accounting terms introduced in this chapter:
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) A financial statement showing the revenue, expenses, and net earnings of a corporation during the current accounting period.
____ (b) A distribution of cash to stockholders.
____ (c) A distribution to stockholders of additional shares of stock, accompanied by a proportionate reduction in the par value per share.
____ (d) The market price of a share of preferred stock, divided by the net income of the corporation.
____ (e) A correction in the amount of net income reported in an earlier accounting period.
____ (f) An event that is material in dollar amount, unusual in nature, and not expected to recur in the foreseeable future.
____ (g) A subtotal sometimes included in an income statement to assist investors in forecasting the income of future accounting periods.
$$\begin{array} { | l | l | } \hline \text { Cash dividend } & \text { Price-earnings ratio } \\\hline \text { Stock dividend } & \text { Income from continuing operations } \\\hline \text { Stock split } & \text { Statement of retained earnings } \\\hline \text { Earnings per share } & \text { Prior period adjustment } \\\hline \text { Extraordinary item } & \\\hline\end{array}$$

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Definitions:

Voidable Title

A title that is capable of, or subject to, being judged invalid or void.

Good Faith Purchaser

An individual who buys something without knowledge of any outstanding rights, claims, or encumbrances held by others, thereby receiving full legal rights to the item.

FOB

An acronym for "Free on Board", a shipping term used in international trade to denote when liability and ownership of goods is transferred from seller to buyer.

Shipment Contract

A type of sale contract in which the seller is obligated to send the goods to the buyer, but the risk of loss passes to the buyer when the goods are delivered to the carrier.