outstanding check

Examples of outstanding check in the following topics:

• Days Sales Outstanding

  • The days sales outstanding figure is an index of the relationship between outstanding receivables and credit account sales achieved over a given period.
  • Typically, days sales outstanding is calculated monthly.
  • Days sales outstanding is considered an important tool in measuring liquidity.
  • Days sales outstanding tends to increase as a company becomes less risk averse.
  • Changes in sales volume influence the outcome of the days sales outstanding calculation.

• Author Acknowledgements

  • Inna Grushko (deceased), who wrote the glossary; Diane Mathios, who checked every homework problem in the first edition; Kathy Plum, Lenore Desilets, Charles Klein, Janice Hector, Frank Snow, Dr.
  • Many of the students gave us permission to include their outstanding word problems as homework.

• Repurchasing Stock

  • Reasons can include: (1) to cancel and retire the stock; (2) to reissue the stock later at a higher price; (3) to reduce the number of shares outstanding and increase earnings per share (EPS); or (4) to issue the stock to employees.
  • For example, if the market fairly prices a company's shares at $50 a share, and the company buys back 100 shares for $5,000, it now has $5,000 less cash but there are also 100 fewer shares outstanding.
  • It can improve EPS due to the fewer number of shares outstanding as well as unchanged earnings.
  • In auditing financial statements, it is a common practice to check for this error to detect possible attempts to "cook the books. "

• Answers to Chapter 12 Questions

  • The Fed's liabilities are currency outstanding, deposits by depository institutions, U.S.
  • Go through the T-account transactions for the checking writing process by changing the amount of the check.

• Personal Financial Management

  • When planning personal finances there are many financial products one might consider: such as banking products (checking, savings accounts, credit cards, and consumer loans), investment products (stock market, bonds, and mutual funds), and insurance products (life insurance, health insurance, and disability insurance).
  • You can write out a check to be deposited into your savings account, but it's much easier to arrange with your bank to automatically transfer a certain amount from your paycheck or your checking account into your savings.
  • For example, if your money is sitting in a low-rate checking or savings account, consider moving it to a higher-yielding account, perhaps a CD where the earnings can get an extra boost.
  • If you pay off a debt, such as the outstanding balance on a credit card, or if you make that last loan payment on your car, put that money to work as part of your savings.

• The Fed's Balance Sheet

  • For instance, the students learn how the Fed clears a check between two banks.
  • We show the check clearing process in this chapter.
  • Currency outstanding only includes cash held in bank vaults or cash circulating within the economy.
  • Then the Treasury Department writes checks on its Fed account.
  • We explain the check clearing process in this chapter.

• Stock Splits

  • A stock split increases the number of shares outstanding without changing the market value of the firm.
  • Suppose a company has 1,000 shares outstanding.
  • They own the same percentage of the outstanding shares, though the nominal number of shares increases.
  • Since the market value of the company remains the same, the price of the new shares adjusts to reflect the new number of outstanding shares.
  • For example, a company that has 100,000 shares outstanding that trade at $6 has a market capitalization of $600,000.

• Accounting Considerations

  • On the date of payment, when dividend checks are mailed out to stockholders, the dividends payable account is debited and the firm's cash account is credited.
  • There are 150,000 shares outstanding and the firm will issue 22,500 additional shares.

• Quality decisions

  • The outcome of these decisions will most certainly affect an organization's ability to produce outstanding quality in products and services.
  • In one approach, a member of the surgical staff tracks every object that enters the body cavity during surgery, then checks that object off when it is removed from the cavity.

• Repurchasing Shares

  • A share repurchase is when a company buys its own stock from public shareholders, thus reducing the number of shares outstanding.
  • In a share repurchase, the issuing company purchases its own publicly traded shares, thus reducing the number of shares outstanding.
  • The reduction of the shares outstanding means that even if profits remain the same, the earnings per share increase.
  • Repurchasing shares will lead to a corresponding increase in price of the shares still outstanding.
  • The market capitalization of the company is unchanged, meaning that a reduction in the number of shares outstanding must be accompanied by an increase in stock price.