A business that sells goods from inventory. The business could be a retailer, wholesaler, distributor, manufacturer, etc.
A business that sells goods from inventory. The business could be a retailer, wholesaler, distributor, manufacturer, etc.
A sole proprietorship, partnership, or corporation organized for the purpose of earning profits and enhancing the financial position of the owners.
See cash surrender value.
A potential loss that is dependent upon some future event occurring or not occurring. If the loss is probable and the amount can be estimated, then the loss and a liability are recorded with a journal entry. If the loss...
A record of the details to support a general ledger account. The general ledger account is often referred to as the control account. For example, the accounts receivable subsidiary ledger provides the details to support...
Past omitted dividends on cumulative preferred stock. Generally these omitted dividends were not declared and, therefore, do not appear on the corporation’s balance sheet as a liability. However, they must be...
See donor-imposed restriction.
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...
Often referred to as write-up work, a compilation refers to financial statements prepared by an accountant without reviewing or auditing the amounts. Often the accountant merely takes a client’s amounts and...
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 workforce Pass your accounting class Understand...
Long-term assets that are reported under the classification of property, plant, and equipment on a company’s balance sheet. These assets are depreciated over their useful life.
See contingent gain.
Why are some expenses deferred? Definition of Deferred Expenses Under the accrual basis of accounting, an expense is a cost that is used up, has expired, or is directly related to revenues reported on a company’s...
A journal entry to correct an erroneous amount previously entered in the general ledger.
The person or business that receives a loan from a bank or other lender.
Bonds with one maturity date (as opposed to serial bond).
Actual changes in cash as opposed to accounting revenues and expenses.
or discount is to be amortized to interest expense over the life of the bonds. Hence, the balance in the premium or discount account is the unamortized balance. Where the Premium or Discount on Bonds Payable is...
Amounts spent for property, plant and equipment.
See first in, first out (FIFO).
The acronym for cost of sales or for the cost of services.
In a bank reconciliation, what happens to the outstanding checks of the previous month? Definition of Outstanding Checks Outstanding checks are checks written by a company, but the checks have not cleared the bank...
General rules upon which more-detailed, specific accounting rules and standards are based. To learn more, see Explanation of Accounting Principles.
What is EBITDA? EBITDA is the acronym for earnings before interest, taxes, depreciation and amortization. Take our Financial Ratios Exam. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How...
Often referred to as fixed assets. This would include long term assets such as buildings and equipment used by a company. Plant assets (other than land) will be depreciated over their useful lives.
The percentage resulting from dividing the dividends per share by the market price per share.
An employee’s pretax compensation that is based on annual or monthly amounts rather than an hourly rate. Management employees are usually paid salaries. To learn more, see Explanation of Payroll Accounting.
A class of corporation stock that provides for preferential treatment over the holders of common stock in the case of liquidation and dividends. For example, the preferred stockholders will be paid dividends before the...
Inventory that is less than the expected amount. It might be associated with theft or damage.
they will be paid. As a result, a loan that is due in 11 months might be listed first even though other obligations will be due within one month. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
, for its financial statements to comply with the accrual method of accounting it needs to record the following accrual adjusting entry as of December 31 (assuming its billing will take place in early January): debit the...
See income statement. To learn more, see Explanation of Income Statement.
A legal agreement to pay rent to the lessor for a stated period of time. Sometimes the lease is in substance a purchase of an asset and a financing arrangement. For example, if a company agrees to lease a forklift truck...
A term associated with petty cash. Replenish means to return the amount of actual cash in the petty cash box back to the amount appearing in the general ledger account Petty Cash. This is done whenever the amount of...
Regression analysis with only one independent variable.
See cost-volume-profit (CVP).
An asset such as cash, accounts receivable, or a note receivable where the amount is a fixed, stated amount. Holding these assets during periods of inflation will result in a loss of purchasing power.
See Financial Accounting Standards Board.
See American Institute of Certified Public Accountants.
A book of original entry that requires that both the account being debited and the account being credited be listed along with the respective amounts. Because of accounting software and special journals there are...
Featured Review
"I have a BS in accounting, and was previously working as an accountant/cash manager. Then, I took 15 years off to raise my kids. Once I decided to go back to work, I felt very out of the loop, so to speak, when it came to accounting. My education and work experience had been such a long time ago. I found AccountingCoach quite by accident, but once I looked it over, I became a PRO user so that I could track my progress and have lifetime access to many of the other advantages PRO provides, like the videos and quick tests. I really liked that everything was organized into subjects and that I could either go in order, or click into different areas and read or work on a specific accounting subject. Working through various parts of your program really helped me remember different things that I had previously learned, and also helped give me the confidence to get back on track with my career. I am currently working as an assistant controller. I still go back in now and then to reinforce some of my previous education, as well as to go over things I don't have as much experience in, like non-profit accounting. This really is a great site, whether you're new to accounting, or you already have an accounting background and just need to use it to reinforce your knowledge or improve your skills. I have never regretted spending the money to become a PRO user." - Danna E.
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: