An expense reported on the income statement that did not require the use of cash during the period shown in the heading of the income statement. The typical example is depreciation expense. Also, the write-down of an...
An expense reported on the income statement that did not require the use of cash during the period shown in the heading of the income statement. The typical example is depreciation expense. Also, the write-down of an...
The increase in a carrying amount. Also see write-up work.
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...
It is common for a small quantity to account for most of the value. Examples: 20% of the people may have 80% of the wealth; 20% of the members do 80% of the work; 20% of the items in inventory account for 80% of the...
See inventory: work-in-process (WIP).
In securities, a party that assists a company in issuing stock or bonds.
See uncleared check.
The compensation usually associated with executives, managers, professionals, office employees, etc. whose pay is stated on an annual or on a monthly basis. (On the other hand, “wages” is usually associated...
Future amounts that have been discounted to the present.
See Statement of Financial Accounting Standards.
See net operating income (NOI).
A listing of the materials included in a product. A bill of material could be thought of as a bakery’s recipe for producing one of its products.
See current liabilities.
Money set aside for a specific purpose. An individual’s monthly mortgage payment might include $300 per month for the real estate taxes due at the end of the year. The $300 is said to be put into escrow each...
Form 990 is the Internal Revenue Service (IRS) form entitled Return of Organization Exempt from Income Tax. This federal form must be filed annually by tax exempt organizations. However, some organizations such as...
A current asset whose ending balance should report the cost of a merchandiser’s products awaiting to be sold. The inventory of a manufacturer should report the cost of its raw materials, work-in-process, and...
A company’s net income from the start of the current accounting year until a specified date. For example, the year-to-date net income at May 31, 2024 for a calendar year company is the net income from January 1,...
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...
The revenue from the next unit.
A cost flow assumption where the last (recent) costs are assumed to flow out of the asset account first. This means the first (oldest) costs remain on hand. To learn more, see Explanation of Inventory and Cost of Goods...
This is an operating expense resulting from making sales on credit and not collecting the customers’ entire accounts receivable balances.
Point of sale.
An additional quantity of items held in inventory in order to minimize the chance of an item being out of stock.
Using capital stock (common stock or preferred stock) instead of debt in order to finance an investment such as a plant asset.
Dollars of gross profit divided by the dollars of net sales. Also known as gross margin.
An amount remaining after another amount is subtracted. In the accounting equation, owner’s equity is the residual of assets minus liabilities.
See pass-through contributions.
See inventory: finished goods.
The products in a manufacturer’s inventory that are completed and are awaiting to be sold. You might view this account as containing the cost of the products in the finished goods warehouse. A manufacturer must...
Retained earnings not available for dividends.
The term that refers to the stock of a corporation which is traded on the stock exchanges (as opposed to stock that is privately held among a few individuals).
The products with significant value that emerge at a split-off point in a process. When a joint product has little value it is referred to as a by-product.
The amount by which the proceeds from the sale of investments exceeded the carrying amount of the investments that were sold. It is reported as a non-operating or “other” item on a multiple-step income...
See direct materials usage variance.
A non-operating item resulting from the sale of this long-term asset for less than its carrying amount (or book value).
A current asset representing amounts paid in advance for future expenses. As the expenses are used or expire, expense is increased and prepaid expense is decreased.
The method of accounting for treasury stock whereby the cost of the stock that is repurchased by the issuing corporation is recorded and is reported in the contra stockholders’ equity account Treasury Stock.
A term used to describe checks written by a company that have been received and paid by the bank on which they were drawn or written. The check number and amount will appear on the company’s checking account...
A balance sheet which is a projection of the amounts at a future date. It should be based on the projected, budgeted transactions.
The internal growth of a company’s existing businesses. Organic growth excludes the additional sales resulting from acquiring another company.
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