Questions & Answers (Q&A)

Harold Averkamp, CPA, MBA

All 1,065 questions have been answered personally by Harold Averkamp, CPA, MBA. Harold is the sole-author of all the instructional content found on
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Q&A Archive (1,065)

What are accounting ratios?

Accounting ratios (also known as financial ratios) are considered to be part of financial statement analysis. Accounting ratios usually relate one financial statement amount to another. For example, the inventory turnover ratio divides a company's cost of goods sold for a recent… Read More.

What are departmental overhead rates?

Departmental overhead rates are used by many manufacturers instead of using a single, plant-wide overhead rate. The reason for departmental overhead rates is that a manufacturer is likely to produce many diverse products which use different processes (each of which has different… Read More.

What are production costs?

In managerial accounting and cost accounting, production costs are the direct materials, direct labor, and manufacturing overhead used to manufacture products. The production costs are also referred to as manufacturing costs, product costs, a manufacturer's inventoriable costs, or the costs occurring in… Read More.

What is the cost of goods manufactured?

In managerial accounting and cost accounting, the cost of goods manufactured is a schedule, statement, or calculation of the production costs for the products that were completed in an accounting period. In other words, the cost of goods manufactured is the manufacturing… Read More.

What is leverage?

In accounting and finance, leverage refers to the use of a significant amount of debt and/or credit to purchase an asset, operate a company, acquire another company, etc. Generally the cost of borrowed money is much less than the cost of obtaining… Read More.

What are sundry expenses?

In accounting and bookkeeping, sundry expenses are expenses that are small in amount and do not occur often. Since these items are not significant, a company might use one general ledger account with the title Sundry Expenses for recording the debit amounts.… Read More.

What is a predetermined overhead rate?

A predetermined overhead rate is often an annual rate for assigning or allocating indirect manufacturing costs to the goods it produces. Manufacturing overhead is allocated to products for various reasons including compliance with U.S. accounting principles and income tax regulations. A predetermined… Read More.

What is long-term debt?

In accounting, long-term debt generally refers to a company's loans and other liabilities that will not become due within one year of the balance sheet date. (The amount that will be due within one year is reported on the balance sheet as… Read More.

What is managerial accounting?

Managerial accounting is also known as management accounting and it includes many of the topics found in cost accounting. Some managerial accounting topics focus on computing a manufacturer's product costs that are needed for the external financial statements. For example, the manufacturer's… Read More.

What is the bookkeeping equation?

The bookkeeping equation for a sole proprietorship is assets = liabilities + owner's equity. The bookkeeping equation for a corporation is assets = liabilities + stockholders' equity. The bookkeeping equation is also referred to as the accounting equation. In the bookkeeping equation:… Read More.