The abbreviation for the accounting and bookkeeping term debit.
The abbreviation for the accounting and bookkeeping term debit.
Under accrual accounting, how are worker comp premiums handled? Worker comp insurance premiums should be charged to the areas where the related wages and salaries are charged. Let’s assume that the net cost of worker...
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).
See deferred expense.
See inventory: finished goods (FG).
A technique used when processing accounts payable in order to be certain that only legitimate bills and invoices are paid. Its name is derived from the matching of 1) the vendor invoice with 2) the company’s...
A long term asset account containing the cost of delivery equipment acquired by a company and used in its business. The account will appear on the balance sheet under the heading of Property, Plant and Equipment. There...
The expenses directly incurred by a nonprofit organization in providing one of its programs.
An amount earned by a company on its interest bearing bank accounts or other investments. The amount should be reported as Interest Revenues, Interest Income, or Investment Revenues in the accounting period in which the...
For a manufacturer these would include factory supplies and other materials considered to be manufacturing overhead.
What is accumulated depreciation? Definition of Accumulated Depreciation Accumulated depreciation is the total amount of a plant asset’s cost that has been allocated to depreciation expense (or to manufacturing...
Also referred to as manufacturing overhead, indirect manufacturing costs, factory burden, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
One of two broad functional categories for sorting and reporting a nonprofit organization’s expenses. (The other is program expenses.) Supporting services expenses consists of 1) management and general expenses,...
A reduction in the cost of goods purchased that is granted by a supplier without the physical return of the goods. Also a general ledger account in which the purchase allowances are recorded under the periodic inventory...
A promise to repair, replace, refund, etc. a product during a specified period. The company making the promise has a contingent liability and a warranty expense that should be recorded at the time the product is sold.
Corporations whose stock is traded on stock exchanges. Also referred to as publicly-traded corporations.
What is a defined benefit pension plan? A defined benefit pension plan is a retirement plan in which the employer commits to paying a specified monthly payment to each eligible employee when he or she retires at a stated...
Buildings is a noncurrent or long-term asset account which shows the cost of a building (excluding the cost of the land). Buildings will be depreciated over their useful lives by debiting the income statement account...
Goods or services provided instead of money.
This is a record on an individual job (product, batch) within the job costing system. For items in process this is a subsidiary record to the general ledger account inventory: work-in-process (WIP).
Also referred to as a “p.o.” A multi-copy form prepared by the company that is ordering goods. The form will specify the items being ordered, the quantity, price, and terms. One copy is sent to the vendor...
Manufacturing overhead assigned to units of output. Often this is applied via a standard overhead rate. See the Explanation of Standard Costing.
A situation where there is correlation between the independent variables used in explaining the change in a dependent variable. When this condition exists, you cannot have confidence in the individual coefficients of the...
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...
What is stockholders' equity? Definition of Stockholders’ Equity Stockholders’ equity (also known as shareholders’ equity) is reported on a corporation’s balance sheet and its amount is the difference between the...
A highly summarized income statement
A term often used when referring to office workers, managers, professionals, and executives. These employees’ pay is often stated as a salary for a month (and not as an hourly pay rate).
This account shows the amount of delivery expense incurred (occurring) during the accounting period shown in the heading of the income statement. The title of this account could also be Freight Out or Transportation...
This current liability account reports the amount a company owes (must remit) for its employees’ Social Security and Medicare taxes as of the date of the balance sheet.
The current asset which reports the cost of a retailer’s, wholesaler’s, or distributor’s goods purchased to be resold, which have not yet been sold as of the balance sheet date.
See Explanation of Inventory and Cost of Goods Sold.
A bond (long-term debt) that is secured by a lien on real estate.
The combination of direct materials and direct labor.
Federal government securities with a fixed interest rate and maturing in 10 years or less.
Commitments are items that are not reported as liabilities as of the balance sheet date. Some of these items are reported in the notes to the financial statements. Examples include noncancelable contracts to rent space...
The term used by manufacturers to indicate that the manufacturing overhead applied or assigned to its production is greater than the amount actually incurred.
Comprehensive income consists of the following two components (which are reported on the statement of comprehensive income): Net income (or loss) from the income statement, and Other comprehensive income (some...
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.
See separation of duties.
A right to buy a specific number of shares of stock at a specific price by a specific date.
Featured Review
"I'm a financial controller (formerly). During Covid, we were laid off! I have an associate, bachelor, and MBA in accounting, as well as 35 plus years of experience! Now, for the past few years, I have owned my own accounting firm. I became a PRO user because I needed access to a valid source of readily-available, easy-to-find information. I have researched and found the PRO membership to have the information I need. I like that the materials are easy to find and to understand. I've purchased AccountingCoach PRO for two of my employees as well to earn their certifications. This is also my go-to when I need to have a legitimate source for my clients. Almost all of my clients are from different industries and have different reporting requirements. Cash or accrual, percentage of completion, etc. Simple things, like where other income and expenses go, and how it affects gross margins if categorized incorrectly. I have been able to keep up with almost all of the accounting methods. This material has been far better than any I have found so far! Right at my fingertips, it's not easy finding a valid source of information on the internet! I keep myself sharp and knowledgeable with this material in order to help my clients by providing accurate financial data they can rely on to maintain, grow and make informed decisions. I'm now a construction industry accountant/fractional CFO, and construction is booming. More and more construction businesses are on the rise, and very few accountants have access to this kind of accounting knowledge!" - Terry K.
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: