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.
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.
The best fitting line through a series of points as determined by the least-squares method.
The acronym for original equipment manufacturer.
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.
The amounts in a company’s bank account that are not yet accessible because the checks deposited into the account have not yet cleared the bank on which they were drawn.
Relevant or meaningful data.
The additional revenues from an additional quantity. It is similar to marginal revenue, except that marginal revenue refers to the revenue from the next unit. Incremental revenue might be the additional revenues from the...
A liability account that reports the amount of taxes that a company owes as of the balance sheet date.
What is an unpresented check? An unpresented check is a check written by a company and entered in its records, but the check has not yet cleared the company’s checking account. In other words, the check has not yet...
A check bearing a date in the future. The company receiving such a check should not report the check as cash until the date of the check.
, etc. Recording a Bill Payable Under the accrual method of accounting or bookkeeping, a bill payable or unpaid vendor invoice is recorded in Accounts Payable with a credit entry. (The debit will likely be recorded as an...
the recording of the transactions, an accountant or the business owner will review the bookkeeper’s work and make the required adjusting entries before the company’s financial statements are distributed. (Larger...
The time between when a check is written and when the check clears the bank account on which it is drawn.
The borrower who provides to a lender an asset as collateral for a loan.
The increase in a carrying amount. Also see write-up work.
See direct labor efficiency variance and variable manufacturing overhead efficiency variance.
See old-age, survivor, and disability insurance (OASDI).
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...
See Public Company Accounting Oversight Board (PCAOB).
See accelerated depreciation.
A cost or expense where the total changes in proportion to changes in volume or activity. For example, if a company pays a sales commission on all of its sales, commission expense is a variable expense because...
A budget that flexes with volume. Under a flexible budget the budgeted amount of manufacturing overhead will increase if the company produces more units than planned. The flexible budget will decrease if the company...
A term that refers to a negative checking account balance. It arises when a company writes checks in excess of the amount it has on deposit in its checking account.
The person or business that receives a loan from a bank or other lender.
The actual cost of direct materials, the actual cost of direct labor, and manufacturing overhead applied by using a predetermined annual overhead rate.
A potential gain that is not recognized by accountants in the financial statements until it actually occurs. For example, Company P is suing Company D over a patent infringement. Company P has a contingent gain. Because...
A journal entry to correct an erroneous amount previously entered in the general ledger.
The person that owes money. If a bank lent you money, the bank is the creditor and you are the debtor.
The relationship between two variables. There can be correlation without a cause-and-effect relationship. Also see coefficient of correlation.
An estimate of an asset’s market value
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...
(noncurrent) liability account Bonds Payable will be credited with the face value of the bond. Cash will be debited for the cash received, and any difference will be recorded in one or two of the following bond-related...
See premium on bonds payable.
See debenture bond.
See prepaid expense.
In the EOQ model, the holding costs are the incremental costs of storing or holding an item in inventory for one year.
Budgetary slack means providing a cushion in a budget in order to avoid an unfavorable variance at the end of the budget year. The budgetary slack might be achieved by entering budget expense amounts that are larger than...
A series of equal amounts occurring at the beginning of each equal time interval. Also known as an annuity in advance. An example would be the monthly rent on an apartment.
See Accounting Principles Board.
This current liability account reports the amount of interest the company owes as of the date of the balance sheet. (Future interest is not recorded as a liability.)
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