Questions & Answers (Q&A)

Download all Q&A in high
quality PDF format when you
Upgrade to PRO.

Harold Averkamp, CPA, MBA

All 1002 questions have been answered personally by Harold Averkamp, CPA, MBA. Harold is the sole-author of all the instructional content found on AccountingCoach.com.
Read More…

Q&A Archive

What is Notes Payable?

In accounting, Notes Payable is a general ledger account in which a company records the face amounts of the promissory notes that it has issued. The amounts for the promissory notes (or simply notes) that have not been repaid are reported as… Read More.

What is a checking account?

A checking account is a bank account in which a company deposits money and can subsequently withdraw the money by writing a check, by using a debit card, arranging for electronic transfers, etc. Except for the uncollected funds associated with recently deposited… Read More.

What is a long-term liability?

A long-term liability is a noncurrent liability. That is, a long-term liability is an obligation that is not due within one year of the date of the balance sheet (or not due within the company's operating cycle if it is longer than… Read More.

What is a credit balance?

In accounting, a credit balance is the ending amount found on the right side of a general ledger account or subsidiary ledger account. A credit balance is normal and expected for the following general ledger and subsidiary ledger accounts: Liability accounts. These… Read More.

What is the break-even point?

In accounting, the break-even point refers to the revenues needed to cover a company's total amount of fixed and variable expenses during a specified period of time. The revenues could be stated in dollars (or other currencies), in units, hours of services… Read More.

What is direct labor?

Direct labor refers to the employees and temporary help who work directly on a manufacturer's products. (People working in the production area, but not directly on the products, are referred to as indirect labor.) The direct labor cost is 1) the cost… Read More.

What is the time value of money?

The time value of money tells us that receiving cash today is more valuable than receiving cash in the future. The reason is that the cash received today can be invested immediately and will begin growing in value. For instance, if a… Read More.

What is depreciation expense?

Depreciation expense is the allocated portion of the cost of a company's fixed assets that is appropriate for the accounting period indicated on the company's income statement. For instance, if a company had paid $2,400,000 for its office building (excluding land) and… Read More.

What is insurance expense?

Under the accrual basis of accounting, insurance expense is the cost of insurance that has been incurred, has expired, or has been used up during the current accounting period for the nonmanufacturing functions of a business. (The insurance costs incurred for manufacturing… Read More.

What is a debit balance?

In accounting, a debit balance is the ending amount found on the left side of a general ledger account or subsidiary ledger account. A debit balance is normal and expected for the following accounts: Asset accounts such as Cash, Accounts Receivable, Inventory,… Read More.