A liability account that reports the amount payable as of the balance sheet date. For the account to show a balance, a loss/obligation must be probable and the amount can be estimated. If the lawsuit is remote or only...
A liability account that reports the amount payable as of the balance sheet date. For the account to show a balance, a loss/obligation must be probable and the amount can be estimated. If the lawsuit is remote or only...
What is ERP? Definition of ERP In accounting, ERP is the acronym for enterprise resource planning. ERP could be described as a database software package that supports all of a business’s processes and operations...
A company might construct a building and then sell the building to an investor who in turn leases the building back to the company.
A lender such as a bank who has placed a lien on a borrower’s assets. As a result, the lender has collateral until the loan amount is repaid.
Your Accounting and Bookkeeping Career Perform better at your current job Refresh your skills to re-enter the workforce Pass your accounting class Understand your small business finances Watch the Video
Benefits provided by a company to retirees. Typical examples of potential benefits are pensions, life insurance, and health insurance.
A formal written promise to pay interest every six months and the principal amount at maturity.
Sales before deducting sales returns, sales allowances, and sales discounts.
Reports too little. If an error understates the inventory and the company’s net income, the amount of inventory and the amount of net income being reported are less than the correct amounts.
Often a U-shaped arrangement of the various machines involved in manufacturing a product. This layout eliminates the need to move the item being manufactured from one area or department of the factory to another. In...
A symbol that indicates the total amount of fixed costs during a specified period of time. In the equation of the straight line, y = a + bx, the total amount of fixed costs during the period is represented by...
Federal Unemployment Tax Act. See federal unemployment tax.
’ equity, and statement of changes in equity) is one of the five required financial statements issued by a U.S. corporation whose common stock is publicly traded. This financial statement summarizes on one page all of...
See Securities and Exchange Commission.
One of the main financial statements. The balance sheet reports the assets, liabilities, and owner’s (stockholders’) equity at a specific point in time, such as December 31. The balance sheet is also referred...
For example.
A graph’s vertical scale that usually indicates the total dollars for the volume or units indicated by the x-axis.
The systematic allocation of the cost of a natural resource from the balance sheet to the income statement.
A current asset representing amounts paid in advance for future expenses. As the expenses are used or expire, expense is increased and prepaid expense is decreased.
What are gross sales? Definition of Gross Sales Gross sales are the amounts a company earned from selling its products. The amounts originate from the company’s sales invoices but the total will be adjusted to the...
A liability account that reports the estimated amount that a company will have to spend to repair or replace a product during its warranty period. The liability amount is recorded at the time of the sale. (It is also the...
The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.
See carrying amount.
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.
account. When the annual real estate taxes come due, the lender pays the real estate taxes by using the money in the borrower’s escrow account. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
A long-term asset which indicates the cost of the constructed improvements to land, such as driveways, walkways, lighting, and parking lots. Land Improvements will be depreciated over their useful life by debiting the...
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....
See program evaluation and review technique (PERT).
See cash surrender value.
See Federal Insurance Contribution Act (FICA).
Usually refers to a statement from the bank showing the activity in a company’s checking account. The statement includes the deposits received by the bank, checks paid by the bank, bank service charge, and other...
Obligations due within one year of the balance sheet date. (If a company’s operating cycle is longer than one year, an item is a current liability if it is due within the operating cycle.) Another condition is that...
Revenue that has been earned but not yet invoiced to the customer.
In estimating the ending inventory under the retail method the cost ratio is the cost of goods available divided by the retail value of the goods available.
The best fitting line through a series of points as determined by the least-squares method.
A formal, written promise to pay interest and to repay the principal amount.
) and the income statement will report supplies expense of $7,500 (1,500 units at $5). Assume that a company purchases a delivery truck to be used in its business. Initially the truck’s cost will be recorded in the...
The acronym for original equipment manufacturer.
A term used in break-even analysis to indicate the amount of sales that are above the break-even point. In other words, the margin of safety is the amount by which a company’s sales could decrease before the...
A Latin term that means in proportion. See prorate.
Featured Review
"Our company uses AccountingCoach PRO and has for several years. Our employees sign up for PRO under their own name so that they have a lifetime of educational value for training. We feel that our participation in PRO has improved performance in our Accounting Department with our new hires, and enabled our employees to practice accounting best practices in their everyday work. This has enabled our Accounting employees to do better in their assignments---which increases their earning power. We feel that over the years AccountingCoach PRO has also improved our company bottom line. The cost is well-priced for their products, and their customer service and support is phenomenal. We will continue to use AccountingCoach PRO for all of our educational needs and highly recommend their program." - Dorothy 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: