This is a long term asset account that accumulates the cost of a project that has not yet been placed into service. When the project is finished and placed into the service, the cost is removed from this account and is...
This is a long term asset account that accumulates the cost of a project that has not yet been placed into service. When the project is finished and placed into the service, the cost is removed from this account and is...
What is Construction Work-in-Progress? Author: Harold Averkamp, CPA, MBA Definition of Construction Work-in-Progress Construction Work-in-Progress is a noncurrent asset account in which the costs of constructing...
How do you account for a project under construction? Author: Harold Averkamp, CPA, MBA Accounting for a Project Under Construction If a company is constructing a major project such as a building, assembly line, etc., the...
Is there a difference between work-in-process and work-in-progress? Author: Harold Averkamp, CPA, MBA It depends on the user of the terms. Definition of Work-in-Process I use the term “work-in-process” to mean a...
What is a plant asset? Author: Harold Averkamp, CPA, MBA 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. Plant...
Work-in-progress is the long-term asset account that is used to report the amounts spent on the construction of buildings and equipment until the asset is completed and put into service.
Depreciation Author: Harold Averkamp, CPA, MBA 89 Q&A Popular Recent What is the double declining balance method of depreciation? What is a journal entry? What entry is made when selling a fixed asset? What is...
Balance Sheet Author: Harold Averkamp, CPA, MBA 369 Q&A Popular Recent What is the difference between accounts payable and accounts receivable? How do I calculate the amount of sales tax that is included in total...
The preparation of financial statements from a client’s information and without any review or audit of the amounts.
See inventory: work-in-process (WIP).
That part of a manufacturer’s inventory that is in the production process and has not yet been completed and transferred to the finished goods inventory. This account contains the cost of the direct material,...
Assets associated with depreciation. Examples include buildings, equipment, furniture, fixtures, trucks, automobiles, etc.
What is work-in-process inventory (WIP)? Author: Harold Averkamp, CPA, MBA Definition of Work-in-process Inventory Work-in-process (WIP) inventory pertains to the goods for which the manufacturing has begun, but not yet...
What is capitalized interest? Author: Harold Averkamp, CPA, MBA Definition of Capitalized Interest Capitalized interest is the interest on debt that was used to finance a self-constructed, long-term asset. The...
How do I record exterior cement work? Is it an asset or an expense? Author: Harold Averkamp, CPA, MBA If the cement work was done to repair or maintain existing cement work, then the expenditure should be recorded as an...
See prepaid dues.
See direct labor efficiency variance.
See cost-volume-profit (CVP).
See current ratio.
See working capital.
Working Capital and Liquidity Quiz and Test | AccountingCoach Working Capital and Liquidity(Practice Quiz) Download PDF Author: Harold Averkamp, CPA, MBA For multiple-choice and true/false questions, simply press or...
Current assets minus current liabilities.
What is working capital? Author: Harold Averkamp, CPA, MBA Definition of Working Capital Working capital is the amount of a company’s current assets minus the amount of its current liabilities. Example of Working...
What is the quick ratio? Author: Harold Averkamp, CPA, MBA Definition of Quick Ratio The quick ratio is a financial ratio used to gauge a company’s liquidity. The quick ratio is also known as the acid test ratio. The...
What is the stated interest rate of a bond payable? Author: Harold Averkamp, CPA, MBA Definition of Stated Interest Rate of a Bond The stated interest rate of a bond payable is the annual interest rate that is printed on...
What is DCF? Author: Harold Averkamp, CPA, MBA In accounting, DCF refers to discounted cash flows or to the discounted cash flow techniques such as net present value or internal rate of return. DCF is a preferred method...
When calculating inventory turnover, do you use sales or the cost of goods sold? Author: Harold Averkamp, CPA, MBA I calculate the inventory turnover by using the cost of goods sold. I use the cost of goods sold because...
What does drop ship mean? Author: Harold Averkamp, CPA, MBA One example of drop ship is a manufacturer shipping goods directly to one of its customers’ customer (instead of delivering the goods to the customer that...
What is owner's equity? Author: Harold Averkamp, CPA, MBA Definition of Owner’s Equity Owner’s equity is one of the three main sections of a sole proprietorship’s balance sheet and one of the components of the...
A listing of all of the accounts in the general ledger with account balances after the closing entries have been posted. This means that the listing would consist of only the balance sheet accounts with balances. The...
The depreciation computed for financial reporting purposes—as opposed to income tax depreciation. To learn more, see Explanation of Depreciation.
A record of the details to support a general ledger account. The general ledger account is often referred to as the control account. For example, the accounts receivable subsidiary ledger provides the details to support...
The book value of an asset is the asset’s cost minus the accumulated depreciation since the asset was acquired. This net amount is not an indication of the asset’s fair market value. The book value of an...
The amount by which the proceeds from the sale of land exceeded the carrying amount of the land sold. It is reported as a non-operating or “other” item on a multiple-step income statement.
Assets other than cash, accounts receivables, and notes receivables. Holders of nonmonetary assets could avoid holding losses during periods of inflation.
The situation where the number of units sold is not influenced by a change in selling price. In other words, a price increase does not have a corresponding decrease in the number of units sold.
What does capitalize mean? Author: Harold Averkamp, CPA, MBA Definition of Capitalize In accounting, the word capitalize means to record an expenditure as an asset. The cost of this asset is then allocated to expense...
Working Capital and Liquidity Author: Harold Averkamp, CPA, MBA 87 Q&A Popular Recent What is the difference between accounts payable and accounts receivable? What are prepaid expenses? Which assets are classified as...
What is net working capital? Author: Harold Averkamp, CPA, MBA Definition of Net Working Capital Net working capital is the amount (as opposed to being a ratio) remaining after subtracting a company’s total amount of...
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