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Harold Averkamp, CPA, MBA

All 1030 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 an ordinary annuity?

In accounting, an ordinary annuity refers to a series of identical cash amounts with each amount occurring at the end of equal time intervals. An example of an ordinary annuity is the series of semiannual interest payments that are part of a… Read More.

What is premium on bonds payable?

Premium on bonds payable (or bond premium) occurs when bonds payable are issued for an amount greater than their face or maturity amount. This is caused by the bonds having a stated interest rate that is higher than the market interest rate… Read More.

What are interim financial statements?

Interim financial statements for a corporation are the financial statements covering a period of less than one year. Often interim financial statements are issued for the quarters between the annual financial statements. The purpose is to give investors and other users updated… Read More.

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 the stated interest rate of a bond payable?

The stated interest rate of a bond payable is the annual interest rate that is printed on the face of the bond. The stated interest rate multiplied by the bond's face amount (or par amount) results in the annual amount of interest… Read More.

What are operating expenses?

Operating expenses are the costs associated with a company's main operating activities and which are reported on its income statement. For example, a retailer's main operating activities are the buying and selling of merchandise or goods. Therefore, its operating expenses will include:… Read More.

What is the accrual method?

The accrual method of accounting reports revenues on the income statement when they are earned even if the customer will pay 30 days later. At the time that the revenues are earned the company will credit a revenue account and will debit… 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.