Questions from Financial Accounting

Q: Contrast the following types of bonds: a. Secured and

Contrast the following types of bonds: a. Secured and unsecured. b. Term and serial. c. Callable and convertible.

Q: Shankar Company uses a perpetual system to record inventory transactions. The

Shankar Company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 2 for $40,000, with terms 3/10, n/30. On February 10, the company pays...

Q: What are convertible bonds? How do they benefit both the investor

What are convertible bonds? How do they benefit both the investor and the issuer?

Q: Explain the difference in each of these terms used for bonds:

Explain the difference in each of these terms used for bonds: a. Face amount and carrying value. b. Stated interest rate and market interest rate.

Q: Corporations typically do not first raise capital by issuing stock to the

Corporations typically do not first raise capital by issuing stock to the general public. What are the common stages of equity financing leading to an initial public offering (IPO)?

Q: What are the three potential features of preferred stock? Indicate whether

What are the three potential features of preferred stock? Indicate whether each feature makes the preferred stock appear more like stockholders’ equity or more like long-term liabilities.

Q: Explain why preferred stock often is said to be a mixture of

Explain why preferred stock often is said to be a mixture of attributes somewhere between common stock and bonds.

Q: What would motivate a company to buy back its own stock?

What would motivate a company to buy back its own stock?

Q: How is the accounting for a purchase of a company’s own stock

How is the accounting for a purchase of a company’s own stock (treasury stock) different from the purchase of stock in another corporation?

Q: Explain why some companies choose not to pay cash dividends. Why

Explain why some companies choose not to pay cash dividends. Why do investors purchase stock in companies that do not pay cash dividends?