See stockholders’ equity.
See stockholders’ equity.
On account. Goods purchased with terms of net 10 days, net 30 days, or 2/10, net 30 are goods purchased on credit. Goods sold with similar terms are sales on credit.
Generally, this rule requires that the cost flow assumption used for tax purposes be the same cost flow assumption used for the financial statements. Consult a tax professional about this and other tax matters.
The time required to set up a piece of production equipment.
The process of becoming outdated or no longer being economically feasible (often caused by technology advances). For example, personal computers and computer chips from 2010 are obsolete even though they can be operated....
A right to buy a specific number of shares of stock at a specific price by a specific date.
Payables arising from the purchase of merchandise inventory and outside services. See accounts payable.
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...
This could be the difference between cost and the selling price. For example, a retailer may markup its cost by 50% to arrive at a selling price. In the retail method of costing inventory, markup is used to mean the...
See rolling budget.
See direct labor efficiency variance and direct labor rate variance.
See gross profit percentage.
See direct labor efficiency variance and variable manufacturing overhead efficiency variance.
The income statement format where the operating and nonoperating revenues are grouped and totaled and the operating and nonoperating expenses are grouped and totaled. Then there is one subtraction of the combined...
See perpetual system of inventory.
The term associated with payroll deductions from an employee’s gross wages or gross salary.
The person paying rent for using but not owning the asset.
See payroll taxes payable.
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.
Actual changes in cash as opposed to accounting revenues and expenses.
See first in, first out (FIFO).
See direct labor efficiency variance.
A balance on the left side of an account in the general ledger. Typically expenses, losses, and assets have debit balances.
A balance sheet with at least two columns of amounts. The column of amounts that is closest to the words will be the most recent amounts. The column furthest from the words will contain the oldest amounts. The older...
Delivery expense to be paid by the seller when its merchandise is sold with terms of FOB destination. This is an operating expense and is not included in the cost of merchandise.
Merchandise that has been shipped by a supplier but the merchandise has not yet reached the customer’s location. Goods in transit that were shipped FOB Shipping Point should be included in the customer’s...
Actions taken or not taken prior to issuing financial statements in order to improve the amounts appearing in the financial statements.
See direct materials usage variance.
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.
See working capital.
A revenue account in a bank’s general ledger that indicates the amounts earned by the bank by servicing its customers’ accounts at the bank.
To record accounting entries into a journal.
An asset representing the right to receive the principal amount contained in a written promissory note. Principal that is to be received within one year of the balance sheet date is reported as a current asset. Any...
The cost transferred from one department to the next department in a process costing system.
Current assets minus current liabilities.
See membership dues.
The entry made in a journal. It will contain the date, the account name and amount to be debited, and the account name and amount to be credited. Each journal entry must have the dollars of debits equal to the dollars of...
Bonds with one maturity date (as opposed to serial bond).
The date a corporation pays a dividend to its shareholders. On this date the accounting entry will be a debit to Dividends Payable and a credit to Cash.
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