Chapter 10, Problem 10.1BP

Match terms with their definitions (LO10–1 to 10–8)

Match (by letter) the following terms with their definitions. Each letter is used only once.

Terms

______ 1. PE ratio.

______ 2. Stockholders’ equity section of the balance sheet.

______ 3. Accumulated deficit.

______ 4. Growth stocks.

______ 5. 100% stock dividend.

______ 6. Statement of stockholders’ equity.

______ 7. Treasury stock.

______ 8. Value stocks.

______ 9. Return on equity.

______ 10. Retained earnings.

Definitions

  a.    A debit balance in Retained Earnings.

  b.    Priced high in relation to current earnings as investors expect future earnings to be higher.

  c.    Effectively the same as a 2-for-l stock split.

  d.    The earnings not paid out in dividends.

  e.    The stock price divided by earnings per share.

  f.    Summarizes the changes in the balance in each stockholders’ equity account over a period of time.

  g.    Priced low in relation to current earnings.

  h.    Measures the ability of company management to generate earnings from the resources that owners provide.

  i.    Shows the balance in each equity account at a point in time.

  j.    The corporation’s own stock that it acquired.