See mixed expenses.
See mixed expenses.
all of a company’s expenses (including semivariable expenses) into fixed costs/expenses and variable costs/expenses. For simple businesses with similar products or services, the total amount of fixed...
. To assist in the understanding of a company’s break-even point, its expenses are sorted into fixed expenses, variable expenses, and semivariable or mixed expenses. Examples of Causes for an Increase in a Break-even...
See mixed expenses.
What are semivariable costs? Author: Harold Averkamp, CPA, MBA Definition of Semivariable Costs Semivariable costs are costs or expenses whose behavior is partially fixed and partially variable. That is, part of the...
Costs that are matched with revenues on the income statement. For example, Cost of Goods Sold is an expense caused by Sales. Insurance Expense, Wages Expense, Advertising Expense, Interest Expense are expenses matched...
What are mixed costs? Author: Harold Averkamp, CPA, MBA Definition of Mixed Costs In accounting, the term mixed costs refers to costs and expenses that consist of two components: A fixed component, the total of which...
. Mixed or semivariable costs. These costs are partially fixed and partially variable. Understanding how costs behave is important for management’s planning and controlling of its organization’s costs, and for...
Administrative expenses are part of the operating expenses (along with selling expenses). Administrative expenses include expenses associated with the general administration of the business. Examples include the salaries...
A subgroup of a nonprofit’s supporting activities expenses. This functional expense classification is used for the fundraising activities including fundraising campaigns, mailings for funds from supporters, and...
One of two broad functional categories for sorting and reporting a nonprofit organization’s expenses. (The other is program expenses.) Supporting services expenses consists of 1) management and general expenses,...
One of the financial statements issued by a nonprofit organization which reports expenses according to both function and nature. Learn more about Nonprofit Accounting.
Classifying expenses according to the type of work such as selling, administration, general, and financing.
Used in conjunction with cost or expense behavior. Mixed expenses consist of a constant or fixed portion and a variable portion. For example, sales salaries would be a mixed expense if each sales person’s...
A subgroup of the supporting activities of a nonprofit organization. This functional expense classification is used to report the overall management of the nonprofit organization other than the direct expenses of...
Expenses which do not change in response to reasonable changes in sales or other activity.
The expenses directly incurred by a nonprofit organization in providing one of its programs.
When are expenses credited? Author: Harold Averkamp, CPA, MBA Definition of Expenses Credited Normally, the general ledger accounts for expenses are debited and are expected to have debit balances. The reason they are...
What are sundry expenses? Author: Harold Averkamp, CPA, MBA Definition of Sundry Expenses In accounting and bookkeeping, sundry expenses are expenses that are small in amount and rare in occurrence. For these rare and...
Why are expenses debited? Author: Harold Averkamp, CPA, MBA Why Expenses Are Debited Expenses cause owner’s equity to decrease. Since owner’s equity’s normal balance is a credit balance, an expense must be recorded...
What are prepaid expenses? Author: Harold Averkamp, CPA, MBA Definition of Prepaid Expenses Prepaid expenses are future expenses that have been paid in advance. In other words, prepaid expenses are costs that have been...
A classification on a single-step income statement for both operating and nonoperating expenses and losses that pertain to the time interval shown in the heading of the income statement.
A liability account that reflects the estimated amount a company owes for expenses that occurred, but have not yet been paid nor recorded through a routine transaction. To learn more, see Explanation of Adjusting...
Operating expenses are the costs of a company’s main operations that have been used up during the period indicated on the income statement. For example, a retailer’s operating expenses consist of its cost of...
Expenses that vary with some activity. For example, sales commissions expense and cost of goods sold will be greater when sales are greater; electricity expense will decrease when machine hours are reduced.
What are operating expenses? Author: Harold Averkamp, CPA, MBA Definition of Operating Expenses Operating expenses are the costs that have been used up (expired) as part of a company’s main operating activities during...
Selling expenses are part of the operating expenses (along with administrative expenses). Selling expenses include sales commissions, advertising, promotional materials distributed, rent of the sales showroom, rent of...
Reducing the Need for Accruing Expenses Author: Harold Averkamp, CPA, MBA One day I was explaining to the owner of a small business that I would have to accrue for the shipping expenses associated with his company’s...
Also referred to as SG&A. For a manufacturer these are expenses outside of the manufacturing function. (However, interest expense and other nonoperating expenses are not included; they are reported separately.)...
Obligations that a company has incurred, but have not yet been routinely recorded in Accounts Payable. For example, if the interest on a bank loan is paid on the 10th of each month, then on the last day of each month...
Why are some expenses deferred? Author: Harold Averkamp, CPA, MBA Definition of Deferred Expenses Under the accrual basis of accounting, an expense is a cost that is used up, has expired, or is directly related to...
Are commissions considered to be revenues or expenses? Author: Harold Averkamp, CPA, MBA Definition of Commissions Revenues or Expenses The company or person earning and receiving commissions (such as a percentage of...
space provided. If you have difficulty answering the following questions, learn more about this topic by reading our Improving Profits (Explanation). 1. Fixed expenses are best described as expenses that remain the same...
What are accrued expenses and when are they recorded? Author: Harold Averkamp, CPA, MBA Accrued Expenses Accrued expenses are expenses that have occurred but are not yet recorded in the company’s general ledger. This...
What does it mean to report expenses by function? Author: Harold Averkamp, CPA, MBA Definition of Reporting Expenses by Function Reporting expenses by function means to classify and report expenses according to the type...
What is the difference between expenses and payments? Author: Harold Averkamp, CPA, MBA Definition of Expenses and Payments Under the accrual method of accounting, expenses are costs that have been used up or have been...
What are the two methods for recording prepaid expenses? Author: Harold Averkamp, CPA, MBA Definition of Prepaid Expenses Prepaid expenses refers to payments made in advance and part of the amount will become an expense...
Why are assets and expenses increased with a debit? Author: Harold Averkamp, CPA, MBA Definition of Debit In accounting the term debit indicates the left side of a general ledger account or the left side of a T-account....
What is meant by nonoperating expenses and losses? Author: Harold Averkamp, CPA, MBA Definition of Nonoperating Expenses and Losses Nonoperating expenses are business expenses that are outside of a company’s main or...
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