The provider of goods or services. Also known as the vendor.
The provider of goods or services. Also known as the vendor.
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...
Payables arising from the purchase of merchandise inventory and outside services. See accounts payable.
The net amount of gross sales on credit minus the sales returns, sales allowances, and sales discounts which pertain to the sales on credit.
A current asset representing the cost of supplies on hand at a point in time. The account is usually listed on the balance sheet after the Inventory account. A related account is Supplies Expense, which appears on the...
A person or organization that gives or donates money, property, services, etc.
The method of accounting for treasury stock whereby the cost of the stock that is repurchased by the issuing corporation is recorded and is reported in the contra stockholders’ equity account Treasury Stock.
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...
See deferred expense.
The date that determines which stockholders are entitled to receive a corporation’s declared dividend. No accounting entry is made on this date.
The amount by which the proceeds from the sale of investments exceeded the carrying amount of the investments that were sold. It is reported as a non-operating or “other” item on a multiple-step income...
The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.
A liability account containing the amount of premium on bonds payable that has not yet been amortized to interest expense. To learn more, see Explanation of Bonds Payable.
The mathematical result of sales revenues divided by average total assets during the period of the sales.
The estimated volume in a future period that will be used for allocating indirect manufacturing costs.
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.
A plotting of points that represent both the volume and the associated cost. The y-axis indicates the amount of costs while the x-axis indicates the corresponding volumes.
Under the accrual method of accounting, this account reports the employer’s expense for the company’s 401(k) plan associated with the employees in the warehouse department during the period indicated in the...
See long-term assets.
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...
Income based upon some assumptions.
See inventory: finished goods (FG).
The direct method could refer to the method of preparing the statement of cash flows. The direct method could also refer to the method of allocating a manufacturing facility’s service departments to its production...
What is the difference between the Cash Flow and Funds Flow statements? Definition of Cash Flow and Funds Flow Statements The cash flow statement, known formally as the Statement of Cash Flows, reports a company’s...
The amount of rent that has been earned by the landlord or owner during the accounting period shown in the heading of the income statement, but it has not been received as of the last day of the accounting period.
An Italian monk associated with debits, credits, and double-entry accounting approximately 500 years ago.
See residual income (RI).
A measurement of financial performance of a company’s operating division that is not responsible for its financing and income taxes. The calculation is likely to be 1) the division’s operating income before...
Obligations not reported as liabilities on the balance sheet.
A decrease in the value of a long term asset to an amount that is less than the amount shown under the cost principle.
A structured market for trading stocks and bonds such as the New York Stock Exchange or NASDAQ. Capital market can also include less structured markets such as private placements.
The inventory system where purchases are debited to the inventory account and the inventory account is credited at the time of each sale for the cost of the goods sold. Hence, the balance in the inventory account is...
A statistic known as the coefficient of determination. This statistic indicates the percent change in the dependent variable that is explained by the change in the independent variable(s).
In accounting and bookkeeping this term is used to describe paying a vendor more than once for the amount owed.
A current liability account that reports the amounts owed to employees for hours worked but not yet paid as of the date of the balance sheet.
Often a 1% or 2% reduction in the amount owed if an invoice is paid within 10 days of the invoice date instead of the customary 30 days.
Someone who performs a task for a company, but is not an employee. The IRS has criteria to assist in distinguishing between an independent contractor and an employee.
A projection or estimate of the future quantities and selling prices of products and/or services.
Featured Review
"I am now a bookkeeper for a small company, thanks to AccountingCoach PRO Plus. PRO Plus’ material helped me understand debits and credits; the examples and the breakdown of the financial terminology helped me understand the role of debits and credits and how everything comes together, which also helped me understand how they play a part in the financial statement. This made it easy for me to explain the owners’ overall financial picture to them. I like how a certificate is given at the end of the exam. I was able to use the certificate to land my current job. I will continue to use PRO Plus; my goal is to become my own boss and open a bookkeeping company." - Denise W.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: