See mixed expenses.
See mixed expenses.
In accounting this means to defer or to delay recognizing certain revenues or expenses on the income statement until a later, more appropriate time. Revenues are deferred to a balance sheet liability account until they...
Federal Unemployment Tax Act. See federal unemployment tax.
A statistical tool that uses the least-squares method to estimate the fixed and variable components of mixed costs.
One hundredth (1/100) of a percentage point. In other words, one percentage point is equal to 100 basis points. The difference between an interest rate of 6.5% and 6.75% is 25 basis points.
The additional amount given to employees for the overtime hours. Usually this is the “half-time” in time and one-half. For example, if an employee’s hourly pay rate is $10 per hour and the employee...
A bond (long term note) that can be exchanged by the holder for a specified number of shares of stock in the company. The convertibility feature usually allows for the bond to have a lower interest rate when it is...
The repeated elimination of products without a corresponding decrease in overhead costs. As a result the amount of overhead allocated to each unit of product increases. If selling prices are increased to cover the higher...
Losses result from the sale of an asset (other than inventory) for less than the amount shown on the company’s books. Since the loss is outside of the main activity of a business, it is reported as a nonoperating...
This term is used in place of retained earnings when the balance in the retained earnings account is negative (a debit balance).
A reduction in the original selling price.
See certificate of deposit.
The party receiving goods to be sold. See consigned goods.
A temporary account used in the periodic inventory system to record the purchases of merchandise for resale. (Purchases of equipment or supplies are not recorded in the purchases account.) This account reports the gross...
For a manufacturer these would include factory supplies and other materials considered to be manufacturing overhead.
A target rate. For example, companies may decide to invest only in projects that generate an internal rate of return that is in excess of 12%. The 12% figure becomes the hurdle rate.
See economic order quantity (EOQ) model.
Spoilage or waste that is likely to occur and cannot be avoided at a reasonable cost.
An amount that should be charged to the current accounting period as an expense.
Sometimes used as a heading in place of paid-in capital.
What is GAAP? Definition of GAAP GAAP is the acronym for generally accepted accounting principles. GAAP consists of the following: Basic underlying accounting principles, assumptions, and concepts such as the cost...
A current or future cost that will differ among alternatives. For example, if a company is deciding whether to expand its sales territory, the real estate tax and depreciation on the company’s headquarters building...
In accounting and bookkeeping this term is used to describe paying a vendor more than once for the amount owed.
A person whose pay is based on an annual amount (instead of being based on an hourly rate of pay multiplied by actual hours worked). For example, the officers of a corporation and the heads of departments within a...
An unsecured bond. For example, a bond not secured by a lien on the issuer’s property.
An asset account used to record amounts given to an employee with the expectation of repayment. For example, if an employee is given money by a company and the money is expected to be repaid or spent for company...
A bill issued by a seller of merchandise or by the provider of services. The seller refers to the invoice as a sales invoice and the buyer refers to the same invoice as a vendor invoice.
One component of a manufacturer’s inventory. Sometimes referred to as Stores or Raw Materials. (Other components of a manufacturer’s inventory are work-in-process and finished goods.)
The compensation usually associated with executives, managers, professionals, office employees, etc. whose pay is stated on an annual or on a monthly basis. (On the other hand, “wages” is usually associated...
The activities provided by a nonprofit in carrying out one of its major programs.
The party owning an asset and receiving rent from another party (the lessee).
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...
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.
A cost and/or volume of activity that is outside of an expected range.
See U.S. Treasury bills.
See functional expense classification.
An estimate of an asset’s market value
Featured Review
"AccountingCoach is my go-to for all my accounting needs. It has been a pivotal part of my career. AccountingCoach has had my back in many situations, and has helped me to understand accounting at my pace. I am now a financial/management accountant for one of west Australia’s largest heavy engineering companies. I will continue to use AccountingCoach throughout my career for continued learning and personal growth. I highly recommend AccountingCoach to anyone studying or already in the accounting industry. I, personally, will always be a member. Thank you team AccountingCoach, I wouldn't be where I am today without you." - Gillian L.
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: