See nonprofit organization.
See nonprofit organization.
A sole proprietorship, partnership, or corporation organized for the purpose of earning profits and enhancing the financial position of the owners.
Beginning in 2018, this is one of two classifications of net assets reported on the financial statements of a not-for-profit organization’s financial statements. This classification is to be used instead of the...
Beginning in 2018, this is one of two classifications of net assets reported on the financial statements of a not-for-profit organization’s financial statements. This classification replaces the previous...
What is the difference between a balance sheet of a nonprofit organization and a for-profit business? Author: Harold Averkamp, CPA, MBA Definition of Balance Sheet The balance sheet is one of the main financial...
Prior to 2018, this term was used by a not-for-profit organization to describe net assets without donor-imposed restrictions. Since 2018, this term has been replaced with the classification net assets without donor...
How can I learn bookkeeping at a low cost? Author: Harold Averkamp, CPA, MBA You can use the Internet to learn bookkeeping at little or no cost. For example, at no cost you can read clear explanations of debits and...
Nonprofit Accounting Quiz and Test | AccountingCoach Nonprofit Accounting(Practice Quiz) Download PDF Author: Harold Averkamp, CPA, MBA For multiple-choice and true/false questions, simply press or click on what you...
What are net assets? Author: Harold Averkamp, CPA, MBA Definition of Net Assets Net assets is defined as total assets minus total liabilities. Examples of Net Assets In a sole proprietorship the amount of net assets is...
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
Nonprofit Accounting Author: Harold Averkamp, CPA, MBA 6 Q&A Popular Recent What is the statement of financial position? What are net assets? What is the difference between a balance sheet of a nonprofit organization and...
Accounting Equation Author: Harold Averkamp, CPA, MBA 65 Q&A Popular Recent What is owner's equity? What is the double-entry system? What are accrued expenses and when are they recorded? What is equity? What is a...
Financial Accounting Author: Harold Averkamp, CPA, MBA 114 Q&A Popular Recent What is the accrual basis of accounting? What is the distinction between debtor and creditor? What is accounting? Where do dividends appear on...
Our Explanation of Nonprofit Accounting includes a chart that contrasts the financial statements of a nonprofit (or not-for-profit) organization with those of a for-profit business corporation. There are many examples to...
Activities that are not specifically associated with a specific product or customer. For example, the costs of an audit and filing information with government agencies are examples of organization-sustaining activities.
An organization without owners and with the main purpose of providing services needed by society. After application and approval by the U.S. Internal Revenue Service, a nonprofit organization may be granted tax exempt...
See entity as a whole.
A diagram depicting a company’s hierarchy or chain of command, its business segments, functions, and departments.
What is a nonprofit organization? Author: Harold Averkamp, CPA, MBA A nonprofit organization is an organization without commercial owners and which addresses the needs of society. Nonprofit organizations are also known...
Our Explanation of Nonprofit Accounting includes a chart that contrasts the financial statements of a nonprofit (or not-for-profit) organization with those of a for-profit business corporation. There are many examples to...
See gross profit percentage.
Also referred to as the P & L and the income statement. To learn more, see Explanation of Income Statement.
A division or department of a business whose managers are responsible for both revenues and expenses.
What is illusory profit? Author: Harold Averkamp, CPA, MBA Illusory profit, also called phantom profit, is the difference between 1) the profit reported using historical costs required by US GAAP, and 2) the profit...
Dollars of gross profit divided by the dollars of net sales. Also known as gross margin.
Net income divided by net sales.
What is gross profit? Author: Harold Averkamp, CPA, MBA Definition of Gross Profit Gross profit is defined as net sales minus the cost of goods sold. Gross profit is sometimes referred to as gross margin. (However, gross...
Net sales revenues minus the cost of goods sold.
Where does the purchase of equipment show up on a profit and loss statement? Author: Harold Averkamp, CPA, MBA Reporting the Purchase of Equipment Assuming that the purchase of equipment is a long-term or noncurrent...
What is the difference between gross profit and net profit? Author: Harold Averkamp, CPA, MBA Definition of Gross Profit Gross profit is defined as net sales minus the cost of goods sold. Example of Gross Profit Assume...
What is the statement of activities? Author: Harold Averkamp, CPA, MBA Definition of Statement of Activities The statement of activities is one of the main financial statements issued by a nonprofit organization. It is...
What is a responsibility center? Author: Harold Averkamp, CPA, MBA Definition of Responsibility Center A responsibility center is a part or subunit of a company in which the manager has some degree of authority and...
The internal growth of a company’s existing businesses. Organic growth excludes the additional sales resulting from acquiring another company.
Does a dividend reduce profit? Author: Harold Averkamp, CPA, MBA Definition of Dividend A dividend declared by a corporation is a distribution to its stockholders of the profits the corporation had earned. Since the...
What is the gross profit method? Author: Harold Averkamp, CPA, MBA The gross profit method is a technique used to estimate the amount of ending inventory. The technique could be used for monthly financial statements when...
The analysis of how profits change as volume changes. The calculation of the break-even point is a part of cost-volume-profit analysis.
What is the profit and loss statement? Author: Harold Averkamp, CPA, MBA Definition of Profit and Loss Statement The profit and loss statement, or P&L, is a name sometimes used to describe a company’s income statement,...
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