CH13 [Auditing Debt, Equity, and Long-Term Liabilities Requiring Management Estimates ] Flashcards
A contract between an issuer of bonds and the bondholder stating the time period before repayment, amount of interest paid, if the bond is convertible (and if so, at what price or what ratio), if the bond is callable, and the amount of money that is to be repaid.
Bond indenture
The combination of a corporation’s common stock and preferred stock (if any).
Capital stock
The amount a company received when it issued its shares of stock; includes par value of preferred stock, par value of common stock, and contributed capital in excess of par value.
Contributed capital
Restrictions in debt agreements aimed at protecting the lender (creditor, debt holder, or investor) by restricting the activities of the borrower (debtor).
Debt covenants
The results of a violation of debt covenant requirements resulting in a failure to fulfill the obligation to repay the loan.
Default
A retirement plan in which the company calculates the former employee’s pension benefits based upon the length of their service and the salary that they earned while employed; these types of retirement plans are becoming increasingly rare.
Defined benefit pension plan
A retirement plan in which the company puts a specific amount of money into a fund each year, for the eventual withdrawal by retired employees; the benefits that the retired employees ultimately receive depends on how well, or how poorly, the fund performs between the time the company deposits the money and the employee withdraws it; these types of retirement plans are becoming increasingly common.
Defined contribution pension plan
Benefits (other than pensions) that organizations provide to their retired employees, e.g., healthcare benefits, life and/or disability insurance, and legal services.
Other postemployment benefits (OPEB)
An entity such as a trust company, bank, or other financial institution that is used by an organization to maintain records of investors and account balances and transactions, to cancel and issue certificates, and to process investor mailings.
Transfer agent
The portion of shares that a company keeps in its own treasury. ____________________ may have come from a repurchase or buyback from shareholders, or it may have never been issued to the public in the first place.
Treasury stock
