sheet will report Current portion of long term debt of $18,000. The remaining amount of principal due at the balance sheet date will be reported as a noncurrent or long-term liability. Join PRO to Track Progress Mark...
sheet will report Current portion of long term debt of $18,000. The remaining amount of principal due at the balance sheet date will be reported as a noncurrent or long-term liability. Join PRO to Track Progress Mark...
An actual count of the goods owned by the company. The actual counts are then compared to the quantities reported on the detailed inventory records. If a difference exists, the quantity shown on the inventory record...
do not mislead a current or potential investor, lender, or other person making a decision with the amounts being reported. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your...
More formally known as the Uniform CPA Examination. This rigorous, 14-hour, computer-based exam consists of questions developed by the American Institute of Certified Public Accountants. The exam is in English only and...
A current asset account which includes currency, coins, checking accounts, and undeposited checks received from customers. The amounts must be unrestricted. (Restricted cash should be recorded in a different account.)
A current asset account that reports the amount of future rent expense that was paid in advance of the rental period. The amount reported on the balance sheet is the amount that has not yet been used or expired as of the...
Also known as a CD. A bank time deposit (savings deposit) that cannot be withdrawn until a specified date. For example, a CD might mature in 6, 9, 12, or 18 months. If the amount deposited in a CD needs to be withdrawn...
A corporation’s own stock that has been repurchased from stockholders. Also a stockholders’ equity account that usually reports the cost of the stock that has been repurchased.
See phantom profits.
See full disclosure principle.
See accrued payroll.
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.
A discount that often varies by customer. For example, a company may sell its products to a variety of resellers. Some of the resellers might buy $1 million of products each year, other resellers might purchase $100,000,...
Compensation for employees that is in addition to salaries and wages. Examples include paid absences (vacation, sick, holiday), insurances (health, dental, vision, life), pensions, profit sharing contributions, employer...
A current asset that reports the amount paid for advertising that has not yet taken place. When the advertising occurs the prepaid advertising is reduced and advertising expense is recorded.
In accounting this refers to the multiplication of quantity times price, or number of units times price or cost per unit.
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
The amount before deductions. For example, gross pay is the amount before withholding deductions. Gross sales is the amount before sales returns and allowances and sales discounts.
A liability account that reports the amount of taxes that a company owes as of the balance sheet date.
What are the two methods for recording prepaid expenses? Definition of Prepaid Expenses Prepaid expenses refers to payments made in advance and part of the amount will become an expense in a future accounting period. A...
A series of equal amounts occurring at the end of each equal time interval. Also known as an annuity in arrears. An example is the monthly payments on a loan. Another example is the semiannual interest on a bond.
the special order begins and is completed in January, the company will debit the liability account for $5,000 and will credit a revenue account. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
See line of credit.
What is the cost of goods manufactured? Definition of Cost of Goods Manufactured The cost of goods manufactured is a calculation of the production costs of the goods that were completed during an accounting period. In...
The supplier of goods or services.
A company might construct a building and then sell the building to an investor who in turn leases the building back to the company.
A mathematical tool to optimize profits (contribution margin) given a limited amount of inputs and other constraints.
An intangible asset reported on the balance sheet at the company’s cost (or lower). Often, successful trade names were developed by companies over many years. As a result the cost of the trade name is minimal, but...
The systematic allocation of the cost of an asset from the balance sheet to Depreciation Expense on the income statement over the useful life of the asset. (The depreciation journal entry includes a debit to Depreciation...
. It is important for a company to monitor all of its current assets so that the cash keeps flowing into the company’s checking account. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How...
An individual owner of a business that is not incorporated.
The sales invoice or bill issued by a vendor and received by the buyer. The customer will also refer to the supplier invoice as the vendor invoice.
What is the difference between expenses and payments? Definition of Expenses and Payments Under the accrual method of accounting, expenses are costs that have been used up or have been incurred in the process of earning...
See consistency.
Costs that have been divided up and assigned to periods, departments, products, etc. In depreciation it is the asset’s cost that is assigned to each of the years that the asset is in use. In cost accounting it is...
The amount received from the sale of an asset, from the issuance of bonds or stock, or from a bank loan.
What is the carrying amount? Definition of Carrying Amount The term carrying amount is also known as book value or carrying value. The term carrying amount is often used when there is a valuation account associated with...
The systematic allocation of the discount, premium, or issue costs of a bond to expense over the life of the bond. The systematic allocation of an intangible asset to expense over a certain period of time. The systematic...
See inventory: work-in-process (WIP).
A quality of accounting information that facilitates comparing a company’s reporting of one accounting period to another. For example, the reader of a company’s financial statements can assume that the...
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