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Exam 1- Partnerships and Chapter 10
|A debit balance in a partner's capital account after allocation of gain or loss.
|A partner who has unlimited liability for the debts of the firm
|The basis for dividing net income and net loss in a partnership.
|A form of business organization, usually classified as a partnership and usually with limited life, in which partners, who are called members, have limited liability.
|Limited liability company
|A partnership of professionals in which partners are given limited liability and the public is protected from malpractice by insurance carried by the partnership.
|Limited liability partnership
|A partner who has limited liability for the debts of the firm.
|A partnership in which one or more general partners have unlimited liabilty and one or more partners have limited liability for the obligations of the firm.
|All partners have credit balances after allocation of gain or loss.
|No capital deficiency
|The owners' equity statement for a partnership which shows the changes in each partner's capital balance and in total partnership capital during the year.
|Partners' capital statement
|An association of two or more persons to carry on as co-owners of a business for profit.
|A written contract expressing the voluntary agreement of two or more individuals in a partnership.
|A change in partners due to withdrawl or admission, which does not necessarily terminate the business.
|An event that ends both the legal and economic life of a partnership.
|Corporation, with 75 or fewer stockholders, that is taxed like a partnership.
|A schedule showing the distibution of cash to the partners in a partnership liquidation.
|Schedule of cash payments
|A legal document that incidates the name of the issuer, the face value of bonds, and such other data as the contractual interest rate and the maturity date of the bonds.
|A form of interest-bearing notes payable issued by corporations, universities, and governmental entities.
|Bonds that are the issuing company can retire at a stated dollar amount prior to maturity.
|A type of lease whose characteristics make it similar to a debt-financed purchase and that is consequently accounted for in that fashion.
|Events with uncertain outcomes, such as a potential liability that may become an actual liability sometime in the future.
|Rate used to determined the amount of interest the borrower pays and inverstors receive.
|Contractual (stated) interest rate
|Bonds that permit bondholders to convert them into common stock at their option.
|A debt that a company reasonably expects to pay (1) from existing current assets or through creation of other current liabilities, and (2) within one year or the operating cycle, whichever is longer.
|The difference between the face value of a bond and its selling, when a bond is sold for less than its face value.
|Discount (on a bond)
|A method of amortizing bond dicount or bond premium that results in periodic interest expense equal to a constant percentage of the carrying value of the bonds.
|Effective-interest method of amortization
|Rate established when bonds are issued that remains constant in each interest period.
|Amount of principal due at maturity date of the bond.
|Obligations that a company expects to pay more than one year in the future.
|The rate investors demand for loaning funds to the corporation.
|Market interest rate
|The date on which the final payment on a bond is due from the bond issuer to the investor.
|A long-term note secured by a mortgage that pledges title to specific units of property as security for the loan.
|Mortgage note payable
|An obligation in the form of a written promissory note.
|The international effort by a company to structure its financing arrangements so as to avoid showing liabilities on its books.
|A contractual arrangement giving the lessee temporary use of the property with continued ownership of the property by the lessor. Accounted for as a rental.
|The difference between the selling price and the face value of a bond when a bond is sold for more than its face value.
|Premium (on a bond)
|The value today of an amount to be recieved at some date in the future after taking into account current interest rates.
|Bonds that have specific assets of the issuer pledged as collateral.
|A method of amortizing bond discount or bond premium that allocates the same amount of interest expense in each interest period.
|Straight-line method of amortization
|The relationship between time and money. A dollar received today is worth more than a dollar promised at sime time in the future
|Time value of money
|A measure of a company's solvency, calculated by dividing income before interest expense and taxes by interest expense.
|Times interest earned ratio
|Bonds issued against the general credit of the borrower.