See inventory carrying costs.
See inventory carrying costs.
See donor-imposed restriction.
In accounting this refers to the multiplication of quantity times price, or number of units times price or cost per unit.
See line of credit.
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
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...
Under the accrual method of accounting, this account reports the amount of holiday pay, vacation pay, and sick day pay that the warehouse employees have earned during the accounting period indicated in the heading of the...
An income statement that has more than one subtraction in arriving at net income. An income statement showing gross profit is an indication it is a multiple-step income statement.
See liquidation of LIFO layer.
A bond without a stated interest rate. Because no interest is paid, the bond will sell for a discount from its maturity value. Rather than receiving interest, an investor’s compensation will be the difference...
A lien on real estate to protect a lender. The loan made with such security is referred to as a mortgage loan.
See mixed expenses.
Expenses that vary with some activity. For example, sales commissions expense and cost of goods sold will be greater when sales are greater; electricity expense will decrease when machine hours are reduced.
That part of a manufacturer’s inventory that is in the production process and has not yet been completed and transferred to the finished goods inventory. This account contains the cost of the direct material,...
To learn more, see our Financial Ratios Outline.
See present value of an annuity due table, present value of an ordinary annuity table, and present value of 1 table.
Also referred to as the P & L and the income statement. To learn more, see Explanation of Income Statement.
A report prepared by a professional appraiser with detailed information on the calculation of an asset’s current market value.
What is a basis point? A basis point is a hundredth (1/100) of a percentage point. Expressed another way, one percentage point is equal to 100 basis points. This means that if an interest rate drops by 1/2 of a...
The stated interest rate appearing on the face of the bond. Also referred to as the nominal rate or the stated interest rate.
Savings accounts and certificates of deposits at a bank.
Often a 1% or 2% discount that a buyer may deduct from the amount owed to a supplier (if stated on the supplier’s invoice) for paying in 10 days instead of the customary 30 days. The purchase discount is also...
A donor-imposed restriction on net assets that requires using the assets within a specified passage of time.
See sum of the years’ digits method of depreciation.
See job order cost sheet.
Operations of an entire division, subsidiary, or segment of a company where a formal plan exists to eliminate it from the company. (It involves more than pruning a product line of certain models of products.) The...
The net amount of gross sales on credit minus the sales returns, sales allowances, and sales discounts which pertain to the sales on credit.
Financial Statements Video Training Part 12 Statement of cash flows: introduction, cash flows from operating activities Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your...
A separate line within stockholders’ equity that reports the corporation’s cumulative income that has not been reported as part of net income on the corporation’s income statement. The items that would...
A corporation with a limited number of stockholders and whose stock is usually not publicly traded.
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...
Statement of Cash Flows. See Explanation of Cash Flow Statement.
A restricted asset for the purpose of retiring a bond.
Gross wages or gross salaries minus withholdings for payroll taxes and other items such as insurance, union dues, United Way, etc. Also referred to as “take home pay” or the amount the employee...
The actual cost of direct materials, the actual cost of direct labor, and manufacturing overhead applied by using a predetermined annual overhead rate.
Where can I get official information for federal payroll taxes? For official information on federal payroll taxes we recommend the Internal Revenue Service Publication 15 which is known by two names: Circular E and...
Verifiable, objective (not subjective), and you can depend on it.
See accrued rent expense. Also see accrued rent income.
To loan money for a limited time in exchange for the borrower’s promise of repayment and interest compensation.
Activities involving a batch of products—as opposed to individual items. An example of a batch activity is the setting up of a machine to produce a batch of 1,000 identical items.
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