The preparation of financial statements from a client’s information and without any review or audit of the amounts.
The preparation of financial statements from a client’s information and without any review or audit of the amounts.
The increase in a carrying amount. Also see write-up work.
Often referred to as write-up work, a compilation refers to financial statements prepared by an accountant without reviewing or auditing the amounts. Often the accountant merely takes a client’s amounts and...
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...
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...
See inventory: work-in-process (WIP).
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.
The reduction of an asset’s carrying amount. For example, we often reduce or write down inventory from its cost to its net realizable value when the net realizable value is lower.
The reduction or removal of an asset amount. For example, an account receivable will be removed or written off if the customer is not able to pay the amount owed to the company.
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,...
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...
A method for recognizing bad debts expense arising from credit sales. Under this method there is no allowance account. Rather, an account receivable is written-off directly to expense only after the account is determined...
Why isn't the direct write off method of uncollectible accounts receivable the preferred method? Author: Harold Averkamp, CPA, MBA Definition of Direct Write Off Method Under the direct write off method of accounting for...
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 the direct write-off method? Author: Harold Averkamp, CPA, MBA Definition of Direct Write-off Method The direct write-off method is one of the two methods normally associated with reporting accounts receivable...
How do you write off a bad account? Author: Harold Averkamp, CPA, MBA Definition of the Write-off of a Bad Account The write-off of a bad account usually refers to eliminating an account receivable due to the...
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...
Are LIFO inventory amounts ever written-up to their market value? Author: Harold Averkamp, CPA, MBA LIFO inventory amounts will not be written-up, even when the current market value of the inventory is far greater than...
How do you report a write-down in inventory? Author: Harold Averkamp, CPA, MBA Definition of Write-down in Inventory Under FIFO and average cost methods, when the net realizable value of inventory is less than the cost...
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...
How do I write off old outstanding checks? Author: Harold Averkamp, CPA, MBA Definition of an Old Outstanding Check We will assume that an outstanding check has appeared on the outstanding check list that is part of the...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
Current assets minus current liabilities.
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...
See working capital.
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...
See current ratio.
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
What is the allowance method? Author: Harold Averkamp, CPA, MBA Definition of Allowance Method The allowance method usually refers to one of the two ways for reporting bad debts expense that results from a company...
What is bad debts expense? Author: Harold Averkamp, CPA, MBA Definition of Bad Debts Expense Bad debts expense is related to a company’s current asset accounts receivable. Bad debts expense is also referred to as...
What is a compilation? Author: Harold Averkamp, CPA, MBA Definition of Compilation A compilation refers to a company’s financial statements that have been prepared or compiled by an outside accountant. A compilation is...
What is the working capital ratio? Author: Harold Averkamp, CPA, MBA Definition of Working Capital Ratio The working capital ratio is defined as the amount of a company’s current assets divided by the amount of its...
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...
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...
If I want a gross margin of 25%, what percent should I mark up my product? Author: Harold Averkamp, CPA, MBA Definition of Gross Margin Gross margin as a percentage is the gross profit divided by the selling price. For...
What happens when the high-low method ends up with a negative amount? Author: Harold Averkamp, CPA, MBA The high-low method of determining the fixed and variable portions of a mixed cost relies on only two sets of data:...
What is meant by accounts written off? Author: Harold Averkamp, CPA, MBA Definition of Accounts Written Off Accounts written off is likely referring to accounts receivable that a company deemed to be uncollectible and...
Is an entry made for outstanding checks when preparing a bank reconciliation? Author: Harold Averkamp, CPA, MBA Definition of Outstanding Checks Outstanding checks are checks written by the company, recorded in the...
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