Accounting Terminology
Listed Below Are Nine Technical Accounting Terms Introduced

question 133

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) 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.
$$\begin{array} { | l | l | l | } \hline \text { Postretirement benefits expense } & \text { Deferred income taxes } & \text { Interest coverage ratio } \\\hline \text { Operating lease } & \text { Maturity value } & \text { Loss contingency } \\\hline \text { Capital lease } & \text { Applying leverage } & \text { Estimated liability } \\\hline\end{array}$$

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Definitions:

Equity Securities

Financial instruments indicating ownership in a corporation, such as stocks, which provide dividends and capital gains as returns to investors.

Stated Value

In accounting, a value assigned to share capital that does not have a par value; used for legal capital determination.

No-par Stock

Stock issued without a specified face value or par value.

Share

An individual portion of ownership in a corporation, represented by a stock.