The cost accounting system where similar units are mass produced. Costs are collected by department and are then assigned to the units produced.
The cost accounting system where similar units are mass produced. Costs are collected by department and are then assigned to the units produced.
The title of the official pronouncement of the Financial Accounting Standards Board which establishes a new accounting standard.
A listing of all of the accounts in the general ledger with account balances after the closing entries have been posted. This means that the listing would consist of only the balance sheet accounts with balances. The...
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 fee for the printing of checks ordered by a company. Often the amount is deducted automatically from a company’s checking account by the company that printed the checks.
The bottom line of the income statement when revenues and gains are less than the aggregate amount of cost of goods sold, operating expenses, losses, and income taxes (if the company is a regular corporation).
That part of the accounting system which contains the balance sheet and income statement accounts used for recording transactions.
Sending merchandise to another party (an agent, consignee) in order to sell the merchandise. Also see consigned goods.
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.
The person or organization to whom a check is written.
Financial Statements Video Training Part 6 Balance sheet: current liabilities (notes payable, accounts payable, accrued expenses, customer deposits) Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping...
The balance in a business record such as a general ledger account.
Benefits provided by a company to retirees. Typical examples of potential benefits are pensions, life insurance, and health insurance.
The difference between assets and liabilities, such as stockholders’ equity, owner’s equity, or a nonprofit organization’s net assets. Also used to indicate an owner’s interest in a personal...
In financial accounting this term often refers to the accounting guidelines or principles of conservatism and materiality.
Future amounts that have been discounted to the present.
The temporary contra purchases account used in a periodic inventory system which represents the discounts allowed by paying within prescribed credit terms such as 1/10 (1% can be deducted from the amount owed if paid...
See functional expense classification.
A bill issued by a seller of merchandise or by the provider of services. The seller refers to the invoice as a sales invoice and the buyer refers to the same invoice as a vendor invoice.
A term that is sometimes used interchangeably with gross profit. Others use the term to mean the percentage of gross profit dollars divided by net sales dollars.
See direct materials usage variance. To learn more, see Explanation of Standard Costing.
What is turnover? Definition of Turnover In accounting, the term turnover can have more than one meaning. In some countries turnover is used in place of sales. Turnover also pertains to certain financial ratios that...
What are common-size financial statements? Common-size financial statements present the financial statement amounts as a percentage of a base number. For example, the common-size income statement will report the revenue...
Approximate amounts. Accountants use estimates for depreciation expense, warranty expense, bad debts expense, monthly accruals for utilities, bonuses, income taxes, etc. Also see change in accounting estimate.
A potential loss that is dependent upon some future event occurring or not occurring. If the loss is probable and the amount can be estimated, then the loss and a liability are recorded with a journal entry. If the loss...
Verifiable, objective (not subjective), and you can depend on it.
Paper evidence of ownership in a corporation. The certificate would indicate the type of stock (common, preferred), any restrictions pertaining to the sale of the stock, the number of shares, the par value, etc. Today,...
A bond issued with a series (or staggering) of maturity dates.
The generally accepted accounting principles practiced in the United States.
A sorting of a company’s accounts payable by due date.
A phrase used in depreciation and amortization to indicate that the expense is being allocated on a logical basis (because a cause and effect relationship does not exist).
See direct materials usage variance.
The assigning or dividing up of amounts. For example, depreciation is an allocation process because it assigns an asset’s cost to expense in each of the years the asset is expected to be used. There is also an...
See rolling budget.
The point at which several products emerge from a common process.
See first in, first out (FIFO).
Terms indicating that the seller will incur the delivery expense to get the goods to the destination. With terms of FOB destination the title to the goods usually passes from the seller to the buyer at the destination....
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.
Selling expenses are part of the operating expenses (along with administrative expenses). Selling expenses include sales commissions, advertising, promotional materials distributed, rent of the sales showroom, rent of...
Featured Review
"My purchase of Harold Averkamp's AccountingCoach PRO service was one of my best career decisions. It is embarrassing to say that my accelerated MBA, focused in accounting, was too brief for becoming an accountant. I began subscribing to different online courses, however, these could not deliver exactly what I needed. My problem was solved with my purchase of AccountingCoach PRO. I am so grateful for the streamlined, organized, and invaluable lifetime service of AccountingCoach PRO. The content is well organized into a learning path and includes cheat sheets for quick references. The content is valuable for both current and aspiring careers in accounting and finance. The PRO membership content is also relevant for payapp developers, business owners, investors, and management consultants. I referenced these cheat sheets before every job interview leading into my accounting career, and I am grateful to say that thanks to this, my most recent role is FP&A Manager. Accounting is complicated and vital for all business activities, and I firmly believe that an AccountingCoach PRO membership is the best way to get started with it." - Laurence D.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: