Questions & Answers (Q&A)

Harold Averkamp, CPA, MBA

All 1,059 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 (1,059)

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 is accounts payable?

Accounts payable may refer to: A section of the accounting department that is responsible for processing vendor invoices and other bills for goods and services that a company received on credit. The title of the current liability account containing the amounts owed… Read More.

What is standard costing?

Standard costing is an accounting technique that some manufacturers use to identify the differences or variances between 1) the actual costs of the goods that were produced, and 2) the costs that should have occurred for those goods. The costs that should… Read More.

What is the cash flow statement?

The cash flow statement is one of the main financial statements of a business or a nonprofit entity. (It is also known as the statement of cash flows.) The cash flow statement reports a company's major sources and uses of cash during… 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.

What is gross margin?

Gross margin is the difference between 1) the cost to produce or purchase an item, and 2) its selling price. For example, if a company's manufacturing cost of a product is $28 and the product is sold for $40, the product's gross… Read More.

What is payroll accounting?

Payroll accounting involves a company's recording of its employees' compensation including: gross wages, salaries, bonuses, commissions, and so on that have been earned by its employees withholding of payroll taxes such as federal income taxes, Social Security taxes, Medicare taxes, state income… Read More.

What are nonmanufacturing overhead costs?

Nonmanufacturing overhead costs are the business expenses that are outside of a company's manufacturing operations. These are often referred to as the selling, general and administrative (SG&A) expenses plus the company's interest expense. Examples of the nonmanufacturing overhead costs include the salaries… Read More.