Verifiable, objective (not subjective), and you can depend on it.
Verifiable, objective (not subjective), and you can depend on it.
A qualitative characteristic in accounting. It is achieved when information is verifiable, objective (not subjective) and you can depend on it.
The basic general rules upon which more detailed accounting standards are built. To learn more, see Explanation of Accounting Principles.
Pushing authority and decision making down to the managers and employees who are closer to the work.
The amount needed to replace an asset such as inventory, equipment, buildings, etc. If an asset’s replacement cost is greater than the asset’s carrying amount, the cost principle prohibits the use of the...
The optimum purchase (or production) quantity which minimizes the combined total cost of carrying inventory and processing additional purchase orders (or production setups).
This is the sum of the beginning inventory of merchandise plus the net cost of the merchandise purchased including freight-in.
See inventory: work-in-process (WIP).
See inventory: finished goods.
See Explanation of Standard Costing.
to have AccountingCoach as my most reliable source of information! It is my one and only resource that I don't know what I'd do without it. I became a PRO user many years ago because I was self-teaching to see...
the Video Featured Review "I'm an independent bookkeeper. I'm very happy to have AccountingCoach as my most reliable source of information! It is my one and only resource that I don't know what...
Usually involves a company’s customers remitting amounts to a bank account close to the customers in order for the company to have collected funds sooner. For example, a company with its headquarters in the...
to have AccountingCoach as my most reliable source of information! It is my one and only resource that I don't know what I'd do without it. I became a PRO user many years ago because I was self-teaching to see...
Understand your small business finances Watch the Video Featured Review "I'm an independent bookkeeper. I'm very happy to have AccountingCoach as my most reliable source of information! It is my one and...
the Video Featured Review "I'm an independent bookkeeper. I'm very happy to have AccountingCoach as my most reliable source of information! It is my one and only resource that I don't know what...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
the Video Featured Review "I'm an independent bookkeeper. I'm very happy to have AccountingCoach as my most reliable source of information! It is my one and only resource that I don't know what...
the Video Featured Review "I love, love, love your website, it has helped me to succeed in all the bookkeeping I have done off and on throughout the years. Whenever I had doubts I could easily access the website...
A cost associated with a batch of items, but not directly traceable to an individual item within the batch. For example, the cost to set up a machine to run a batch of 5,000 items is a batch-level cost. This cost must...
A predetermined dollar amount that a pound of material or an hour of labor should cost during an accounting period.
The amount of a long-term asset’s cost that has been allocated to Depreciation Expense since the time that the asset was acquired. Accumulated Depreciation is a long-term contra asset account (an asset account with...
A stockholders’ equity account with a credit balance. The credit balance results when a corporation sells some of its treasury stock for an amount that exceeds the corporation’s cost of the treasury stock...
See uncleared check.
The average balance in the account Accounts Receivable during a period of time. Since the amount reported in the Accounts Receivable account is the ending balance on one specific day, it is necessary to compute an...
A phrase used in depreciation and amortization to indicate that the expense is being allocated on a logical basis (because a cause and effect relationship does not exist).
The type of stock that is present at every corporation. (Some corporations have preferred stock in addition to their common stock.) Shares of common stock provide evidence of ownership in a corporation. Holders of common...
The depreciation used on a company’s income tax return. Usually this is different from the depreciation used on the financial statements.
The section of the U.S. Internal Revenue Service (IRS) code which includes public charities such as religious, scientific, educational, and certain other organizations. Under section 501(c)(3) a nonprofit can be approved...
Merchandise that is not owned by the party in possession of the goods. For example, a craftsperson might have produced 100 ornate wood items. In order to sell the items, the person asks a local merchant to take five of...
into many accounting courses, but I found AccountingCoach to be the best and most reliable accounting resource ever! I like it because it is very well organized and user friendly. I was able to easily find the topics I...
Under the accrual method of accounting, this account reports the employer’s portion of the Social Security and Medicare tax that pertains to the period indicated in the heading of the income statement, whether or...
Scrap or waste that should have been avoided. In other words, abnormal spoilage is the amount that is over and above the normal amount that is expected in a production process.
The cost to operate office equipment during a specified time interval.
The journal entry recorded in the general journal (as opposed to the sales journal, cash journal, etc.).
A right to buy a specific number of shares of stock at a specific price by a specific date.
A section of a publicly traded corporation’s annual report to the SEC (Form 10-K). This section contains extensive information from management about the corporation’s financial condition and its operations.
can master accounting at my own pace, without any time restrictions. The lifetime access ensures I can revisit and reinforce my knowledge whenever needed. Thank you, AccountingCoach, for being the comprehensive,...
Featured Review
"I am currently a returning adult student studying business and accounting. My Intro to Accounting professor recommended AccountingCoach, and it has been invaluable. I opted to become a PRO user because I knew it would serve me well, not only throughout my schooling but in my career as well. The certificates, flashcards, and practice quizzes are a great way to master and maintain accounting concepts. The site is very user friendly and has all the information I could ever need. A fantastic resource!" - Renee S.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: