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Harold Averkamp, CPA, MBA

All 1008 questions have been answered personally by Harold Averkamp, CPA, MBA. Harold is the sole-author of all the instructional content found on AccountingCoach.com.
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Q&A Archive

What is present value?

In accounting, present value likely refers to the amount that remains after future cash amounts have been discounted to an earlier time. (The earlier time is depicted on a timeline as the point 0, which is the beginning of period 1.) The… Read More.

What are indirect manufacturing costs?

Indirect manufacturing costs are a manufacturer's product costs other than direct materials and direct labor. Indirect manufacturing costs are also referred to as manufacturing overhead, factory overhead, factory burden, or burden. Under traditional cost accounting, the indirect manufacturing costs are allocated (or… Read More.

What is an independent variable?

In accounting, an independent variable is ideally a factor that causes a change in the total amount of the dependent variable. In other words, an independent variable should be something that drives a mixed cost to increase or decrease. To illustrate, let's… Read More.

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 are direct materials?

Direct materials are the traceable matter used in manufacturing a product. The direct materials for a manufacturer of dessert products will include flour, sugar, eggs, milk, vegetable oil, spices, and other ingredients in the recipes. In manufacturing, the direct materials are listed… Read More.

What is the coefficient of determination?

The coefficient of determination is a statistic which indicates the percentage change in the amount of the dependent variable that is "explained by" the changes in the independent variables. For example, a manufacturer may have found through the regression analysis of 15… Read More.

What is a dependent variable?

In accounting, a dependent variable is likely to be the total of a mixed cost that will change as the result of several factors. A factor that causes the change in the total cost is referred to as the independent variable. To… 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.