A technique for estimating the number of years or the interest rate necessary to double your money. Divide 72 by the interest rate and you will have the approximate number of years needed to double your money. If your...
A technique for estimating the number of years or the interest rate necessary to double your money. Divide 72 by the interest rate and you will have the approximate number of years needed to double your money. If your...
Advertising Expense is the income statement account which reports the dollar amount of ads run during the period shown in the income statement. Advertising Expense will be reported under selling expenses on the income...
The next best benefit foregone. The opportunity lost. Often measured as the contribution margin given up by not doing an activity. For example, if a sole proprietor is foregoing a salary and benefits of $50,000 at...
as an asset and expensed later. To defer the cost to the balance sheet is to capitalize the costs. Examples of Costs Being Expensed Costs are reported as expenses in the accounting period when they are used up, have...
The indirect manufacturing costs actually incurred during an accounting period.
A current liability account that reports the amounts owed to employees for hours worked but not yet paid as of the date of the balance sheet.
fees, dues, fundraising events, grants, and investment income. Expenses are presented as program activities or supporting activities (management and general, and fundraising). Join PRO to Track Progress Mark the...
One of the main financial statements (along with the balance sheet, the statement of cash flows, and the statement of stockholders’ equity). The income statement is also referred to as the profit and loss...
accounts: Face or maturity value of the bonds (a credit balance in the account Bonds Payable) Unamortized discount (a debit balance in the contra-liability account Discount on Bonds Payable) Unamortized premium (a...
is the cost of goods on hand, it makes sense to relate it to the cost of goods sold. Assume that during the past year a company’s inventory had an average cost of $10,000. (This was the average of the amounts in the...
The person that owes money. If a bank lent you money, the bank is the creditor and you are the debtor.
The average time for a company’s accounts receivable to be collected. See days sales in accounts receivable.
See perpetual system of inventory.
See chief executive officer.
The operating activities of a company, excluding the major segments of the company that are being discontinued.
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.
examples to show the usefulness of Herb’s tip. When a company receives the bank statement for its checking account, the bank statement already shows the deduction for the bank’s service charge. Therefore, the bank...
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...
Regular fees or charges often paid to an organization at regular intervals. For example, a state CPA organization might have annual dues of $200.
deductions from the cash balance per the books. Electronic deposits not yet recorded by the company will become additions to the cash balance per books. Join PRO to Track Progress Mark the Question as Read Must-Watch...
Equipment is a noncurrent or long-term asset account which reports the cost of the equipment. Equipment will be depreciated over its useful life by debiting the income statement account Depreciation Expense and crediting...
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...
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
The allocation of the cost of a plant asset to expense in an accelerated manner. This means that the amount of depreciation in the earlier years of an asset’s life is greater than the straight-line amount, but will...
Usually the difference between the cost of inventory at LIFO versus the cost of inventory at FIFO.
See endowment fund.
The combination of direct materials and direct labor.
, goodwill, etc. that were acquired in a transaction. Deferred charges. This category is used for items that do not fit into the other long-term asset classifications. Join PRO to Track Progress Mark the Question as Read...
The ability to generate cash.
The current asset which reports the cost of a retailer’s, wholesaler’s, or distributor’s goods purchased to be resold, which have not yet been sold as of the balance sheet date.
A document issued to a customer by a seller which reduces the seller’s accounts receivable and its net sales. It also reduces the buyer’s accounts payable and net purchases. A document issued by a bank that...
A word used by accountants to communicate that an expense has occurred and needs to be recognized on the income statement even though no payment was made. The second part of the necessary entry will be a credit to a...
See chief financial officer.
The British term for controller.
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...
Accounting. 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 Refresh your skills to re-enter the...
To report a revenue or expense that has occurred, but has not yet been entered in the accounting records as of the end of the accounting period. To learn more, see Explanation of Adjusting Entries.
A trademark associated with a service rather than a product.
are depreciated using the straight-line method. 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...
A mathematical tool to optimize profits (contribution margin) given a limited amount of inputs and other constraints.
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