See direct labor efficiency variance and direct labor rate variance.
See direct labor efficiency variance and direct labor rate variance.
A restricted asset for the purpose of retiring a bond.
A rolling budget adds a future accounting period’s budget to replace a budget for an accounting period that has past. For example, a company’s 2024 annual budget will become a rolling budget if in February...
The term that refers to the stock of a corporation which is traded on the stock exchanges (as opposed to stock that is privately held among a few individuals).
The inability to pay liabilities as they become due. Some consider a company to be insolvent when its current liabilities exceed its current assets.
The paid-in (or contributed) capital account that is credited $100 for each share of $100 par preferred stock that is issued. If the proceeds from the issuance or sale of one of the shares is greater than $100, the...
See International Accounting Standards Board (IASB).
See inventory: finished goods (FG).
Regression analysis with only one independent variable.
An income statement that subtracts all variable costs and expenses from revenues in order to show the contribution margin. From that is subtracted the fixed costs and expenses to arrive at net income. To learn more, see...
The time between when a check is written and when the check clears the bank account on which it is drawn.
A top ranking corporation official usually reporting to the chief executive officer and responsible for the operations of the corporation.
The acronym for cost of goods sold.
An average that changes with an additional purchase. See perpetual moving average in Explanation of Inventory and Cost of Goods Sold.
The amount that a recurring equal amount deposited at the beginning of each period will grow to under compounded interest. An annuity due is also known as an annuity in advance.
The amount of wages and related expenses that have been incurred by the employer (and earned by the employees) but have not yet been paid.
A phrase that indicates a transaction was between two independent parties and that the resulting amount is a fair representation of the value.
What is the current ratio? Definition of Current Ratio The current ratio is a financial ratio that shows the proportion of a company’s current assets to its current liabilities. The current ratio is often classified as...
An action by a nonprofit organization’s board of directors to earmark an asset for a specified purpose. Since this is not a donor-imposed restriction, the designated asset is classified and reported as part of...
Income based upon some assumptions.
The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.
See net operating income (NOI).
The compensation earned by hourly-paid employees during the interval of time indicated in the heading of the income statement. Under the accrual basis of accounting, the date that wages are paid does not determine when...
The cost of repairing or replacing previously sold products during their warranty periods.
A series of equal amounts occurring at the end of each equal time interval. Also known as an ordinary annuity. An example would be the monthly payments on a loan. Another example is the semiannual interest on a bond.
The discounted value of a series of equal amounts occurring at future points with equal time intervals.
The products with significant value that emerge at a split-off point in a process. When a joint product has little value it is referred to as a by-product.
An income statement account for expense items that are too insignificant to have their own separate general ledger accounts.
The optimum purchase (or production) quantity which minimizes the combined total cost of carrying inventory and processing additional purchase orders (or production setups).
What is gross margin? Definition of Gross Margin Gross margin is the amount remaining after a retailer or manufacturer subtracts its cost of goods sold from its net sales. In other words, gross margin is the retailer’s...
Suppliers. Companies that provide goods or services.
See inventory carrying costs.
See contingent gain.
A loan from a bank or other lender in which the borrower has pledged an asset as collateral in case the loan cannot be repaid in full.
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
Another company that supplies goods or performs services. Also known as a vendor.
Free Alongside Ship. Terms indicating that the seller’s price includes delivery of goods at a ship’s pier. Title to the goods will transfer to the buyer alongside the ship.
Spoilage or waste that is likely to occur and cannot be avoided at a reasonable cost.
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