See gross profit percentage.
See gross profit percentage.
This current liability account reports the amount a company owes the United Way organization as of the balance sheet date. The amount includes the withholdings from employees’ pay plus the amount owed by the...
An income statement account used to record the amount that the asset Inventory is reduced during the accounting period because the net realizable value of the inventory is less than its cost.
Preferred stock where the dividend could be more than the original, stated dividend.
Employer payroll taxes include an employer’s portion of Social Security and Medicare taxes and the state and federal unemployment taxes.
Dollars of gross profit divided by the dollars of net sales. Also known as gross margin.
A highly summarized balance sheet
A payroll tax paid solely by the employer and usually calculated as 0.6% times each employee’s first $7,000 of annual wages or salaries. (The tax rate is 6.0% but a credit of up to 5.4% is usually given for...
A decision whether to make some products or equipment in-house versus purchasing the products or equipment from another company. As in any decision, one must compare the relevant costs and other opportunities. It is...
See declaration date.
The amount that would be agreed upon by two independent persons. The amount to be received in the ordinary course of business in an arm’s length transaction.
Financial Statements Video Training Part 13 Statement of cash flows: cash flows from operating activities, cash flows from investing activities, cash flows from financing activities, quality of earnings Must-Watch Video...
The balance sheet classification that is reported immediately after current assets and before property, plant, and equipment.
See dividends in arrears.
How do you calculate the actual or real interest rate on a bond investment? Definition of Actual or Real Interest Rate on a Bond Investment The actual or real interest rate on a bond payable is also known as effective...
The second section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
Financial statement and other financial information distributed to people outside of a company.
See direct labor efficiency variance.
A balance sheet line to report short-term liabilities that are too insignificant to be identified separately.
One of the main financial statements (along with the income statement and balance sheet). The cash flow statement reports the sources and uses of cash by operating activities, investing activities, financing activities,...
A corporation’s net income after income taxes minus the dividends pertinent to the preferred shares of stock (if any).
Bonds and other debt securities that a company intends to hold until the securities mature. In addition to intent, the company must have the financial ability to be able to hold them until they mature.
The expensing of an intangible asset from the balance sheet to the income statement.
A method of payment used in place of a paper check.
The income statement account which contains a portion of the cost of equipment that is being expensed during the time interval shown in the heading of the income statement.
See exchange of similar nonmonetary assets.
A parody of FIFO used to describe a very slow-moving item in inventory.
Multiplying the individual items contained in each bill of material times the number of units expected to be produced during a specified time period. The result is the total quantity of each input that will be needed for...
The stated legal amount appearing on bonds.
Under this method, net income is determined by analyzing the change in owner’s equity. The alternative is the transaction approach in which each transaction is recorded, sorted and stored.
Financial statements based upon various assumptions.
See Explanation of Inventory and Cost of Goods Sold.
The first major section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
A corporation with a limited number of stockholders and whose stock is usually not publicly traded.
See petty cash replenishment.
The accounting guideline requiring that revenues be shown on the income statement in the period in which they are earned, not in the period when the cash is collected. This is part of the accrual basis of accounting (as...
A technique used to determine the variable rate (slope of a total cost line) of an independent variable and the fixed amount by using just two points: the highest point and the lowest point. For example, if at the...
A method used in allocating the costs of manufacturing service departments (factory administration, maintenance, etc.) directly to the producing departments in the factory. Under this method, no service department cost...
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