A legal agreement to pay rent to the lessor for a stated period of time. Sometimes the lease is in substance a purchase of an asset and a financing arrangement. For example, if a company agrees to lease a forklift truck...
A legal agreement to pay rent to the lessor for a stated period of time. Sometimes the lease is in substance a purchase of an asset and a financing arrangement. For example, if a company agrees to lease a forklift truck...
The name used by a buyer of goods or services for the sales invoice or bill received from the supplier of the goods or services.
Usually refers to a statement from the bank showing the activity in a company’s checking account. The statement includes the deposits received by the bank, checks paid by the bank, bank service charge, and other...
York Stock Exchange is part of the private sector. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your current job...
Management information system.
Includes the main financial statements (income statement, balance sheet, statement of cash flows, statement of retained earnings, statement of stockholders’ equity) plus other financial information such as annual...
This term is used in place of retained earnings when the balance in the retained earnings account is negative (a debit balance).
Usually this refers to manufacturing employees who are not classified as direct labor. Material handlers, mechanics, setup workers, clean up workers are a few examples of indirect labor.
See FASB Interpretation.
The borrower who provides to a lender an asset as collateral for a loan.
What are accruals? Definition of Accruals The accounting and bookkeeping term accruals refers to adjustments that must be made before a company’s financial statements are issued. Accruals involve the following types of...
Your Accounting and Bookkeeping Career Perform better at your current job Refresh your skills to re-enter the workforce Pass your accounting class Understand your small business finances Watch the Video
An employee’s pretax compensation that is based on annual or monthly amounts rather than an hourly rate. Management employees are usually paid salaries. To learn more, see Explanation of Payroll Accounting.
In accounting, cost is defined as the cash amount (or the cash equivalent) given up for an asset. Cost includes all costs necessary to get an asset in place and ready for use. For example, the cost of an item in...
What is EBITDA? EBITDA is the acronym for earnings before interest, taxes, depreciation and amortization. Take our Financial Ratios Exam. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How...
See residual income (RI).
The internal growth of a company’s existing businesses. Organic growth excludes the additional sales resulting from acquiring another company.
See debenture bond.
The statements, standards, interpretations and other financial reporting guidelines issued by the Financial Accounting Standards Board. The FASB pronouncements are available at www.FASB.org.
an agent of the state and will record the sales taxes collected in a current liability account such as Sales Taxes Payable. When the merchant remits the sales taxes to the state, the current liability account is...
An official pronouncement by the Financial Accounting Standards Board that involves a previously issued FASB Standard. FASB Interpretations are part of the generally accepted accounting principles.
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...
Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your current job Refresh your skills to re-enter the workforce Pass your accounting class Understand your small business finances Watch...
A term often used in present value calculations to distinguish a one-time cash amount from an annuity (or series of equal payments).
The abbreviation for the accounting and bookkeeping term debit.
of $1,000 to Cash (a balance sheet account) Notice that only the interest expense of $60 will be included on the income statement. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
The increase in a carrying amount. Also see write-up work.
A payment toward the amount of principal owed. Generally when a loan payment consists of only a principal and interest payment, the amount owed for interest is processed first and the remaining amount of the payment is...
Taking out a loan or issuing bonds in order to acquire an asset or another business.
The amount of an asset’s cost that will be depreciated. It is the cost minus the expected salvage value. For example, if equipment has a cost of $30,000 but is expected to have a salvage value of $3,000 then the...
This accounting guideline states that if doubt exists between two acceptable alternatives (in other words the accountant needs to break a tie), the accountant should choose the alternative that will result in a lesser...
Obligations due within one year of the balance sheet date. (If a company’s operating cycle is longer than one year, an item is a current liability if it is due within the operating cycle.) Another condition is that...
The acronym for original equipment manufacturer.
See fixed expenses.
The revenue from the next unit.
, the payment will be a debit of $27,720 to Accounts Payable, a debit of $280 to Purchase Discounts, a credit to Cash for $28,000. Purchase Discounts Lost is an income statement account.] Join PRO to Track Progress Mark...
See manufacturing costs.
The best fitting line through a series of points as determined by the least-squares method.
In estimating the ending inventory under the retail method the cost ratio is the cost of goods available divided by the retail value of the goods available.
For a manufacturer these would include factory supplies and other materials considered to be manufacturing overhead.
Featured Review
"AccountingCoach has truly been a blessing, and has changed my life! I am a small-business owner and accountant. I became a PRO member because I am relatively new to the accounting industry, and the course offers instructions with detailed steps, answering the ‘why’ to all of my accounting questions. I can totally tell that this course was designed by an accountant, which makes it the absolute BEST! The materials are amazing; I can download tons of templates and Excel spreadsheets, view videos, and listen to MP3 audio files. I have really benefited from the materials in a great way. The quizzes build my confidence, while confirming that I am grasping and retaining the information. I love that I can always go back and search for a topic, and it comes right up so I can learn from the resources provided. This course has made me love accounting more than I ever dreamed!" - Ra'Chael B.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: