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Harold Averkamp, CPA, MBA

All 1024 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

What is the coefficient of correlation?

In simple linear regression analysis, the coefficient of correlation (or correlation coefficient) is a statistic which indicates the relationship between the independent variable and the dependent variable. The coefficient of correlation is represented by r and it has a range of -1.00… Read More.

What is a sunk cost?

A sunk cost is a cost that was incurred in the past and cannot be undone. Since most transactions cannot be undone, most amounts spent in the past can be described as sunk. In other words, a past or sunk cost will… Read More.

What is accelerated depreciation?

Accelerated depreciation is the allocation of a plant asset's cost in a faster manner than the straight line depreciation. Compared to straight line depreciation, accelerated depreciation will mean 1) more depreciation in the earlier years of an asset's life and 2) less… Read More.

What is the units of activity depreciation?

The units of activity depreciation is one of several methods of depreciation. The units of activity method of depreciation is unique in that a plant asset's useful life is expressed in the total units that are expected to be produced or the… Read More.

What is a plant asset?

A plant asset is an asset with a useful life of more than one year that is used in producing revenues in a business's operations. Examples of plant assets include land, land improvements, buildings, machinery and equipment, office equipment, furniture, fixtures, vehicles,… Read More.

What is simple linear regression analysis?

Simple linear regression analysis is a statistical tool for quantifying the relationship between just one independent variable (hence "simple") and one dependent variable based on past experience (observations). For example, simple linear regression analysis can be used to express how a company's… Read More.

What is an asset's useful life?

An asset's useful life is the period of time (or total amount of activity) for which the asset will be economically feasible for use in a business. In other words, it is the period of time that the business asset will be… Read More.

What is straight line depreciation?

Straight line depreciation is likely to be the most common method of matching a plant asset's cost to the accounting periods in which it is in service. Under the straight line method of depreciation, each full accounting year will be allocated the… Read More.

What is a rubber check?

A rubber check is a check that is not paid (or honored) by the bank on which it is drawn. The reason the check is not paid is the maker's account had insufficient funds or not sufficient funds (NSF). Instead of the… Read More.

What is salvage value?

In accounting, salvage value is an estimated amount that is expected to be received at the end of a plant asset's useful life. Salvage value is sometimes referred to as disposal value, residual value, terminal value, or scrap value. The estimated salvage… Read More.