to Cash and a $3,000 credit to the liability account Customer Deposits or Unearned Revenues. With no downpayment or advance payment in December, there is no entry recorded.) The $20,000 contract is not reported as an...
to Cash and a $3,000 credit to the liability account Customer Deposits or Unearned Revenues. With no downpayment or advance payment in December, there is no entry recorded.) The $20,000 contract is not reported as an...
) the remaining years of the lease. The remaining years of the lease include the years in the lease renewals that are reasonably assured. A discussion of your question was done by the Emerging Issues Task Force (EITF) of...
A difference between an actual cost and a budgeted or standard cost, and the actual cost is the lesser amount. In the case of revenues, a favorable variance occurs when the actual revenues are greater than the budgeted...
A lender or supplier who is owed money but does not have a lien on any of the assets of the company that owes the money. If the company that owes the money is liquidated, the unsecured lender receives money only after...
See direct materials usage variance. To learn more, see Explanation of Standard Costing.
Also referred to as manufacturing overhead, indirect manufacturing costs, factory burden, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Future amounts that have been discounted to the present.
and the buyer will record the transaction at $730. There will not be a general ledger account entitled Trade Discount. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your...
Costs that are matched with revenues on the income statement. For example, Cost of Goods Sold is an expense caused by Sales. Insurance Expense, Wages Expense, Advertising Expense, Interest Expense are expenses matched...
The collection of money (currency, coins, checks). Not to be confused with revenues.
See American Institute of Certified Public Accountants.
Management information system.
What if an employee's actual vacation payment is greater than the amount that has been accrued? Let’s assume that a company’s accounting year ends on December 31 and the company has only one employee who worked...
See income statement. To learn more, see Explanation of Income Statement.
What is the procedure for preparing a trial balance? Definition of a Trial Balance A trial balance consists of the following information: The title of each general ledger account that has a balance To the right of the...
Manufacturing overhead assigned to units of output. Often this is applied via a standard overhead rate. See the Explanation of Standard Costing.
A term often used in present value calculations to distinguish a one-time cash amount from an annuity (or series of equal payments).
See net operating income (NOI).
. The amounts paid to the corporation by the original stockholders are reported as paid-in (or contributed) capital within the stockholders’ equity section of the corporation’s balance sheet. Join PRO to Track...
Includes the main financial statements (income statement, balance sheet, statement of cash flows, statement of retained earnings, statement of stockholders’ equity) plus other financial information such as annual...
A temporary account used in the periodic inventory system to record the purchases of merchandise for resale. (Purchases of equipment or supplies are not recorded in the purchases account.) This account reports the gross...
Used in conjunction with cost or expense behavior. Mixed expenses consist of a constant or fixed portion and a variable portion. For example, sales salaries would be a mixed expense if each sales person’s...
This activity, which involves playing the float, is sometimes used when a company is facing an overdrawn checking account. Assume that a company has a checking account at NY Bank that is about to overdraw. To prevent the...
Officers of a corporation are appointed by the board of directors to execute the policies that have been established by the board of directors. The officers include the chief executive officer (CEO), the chief operations...
A formal, written promise to pay interest and to repay the principal amount.
A part of a manufacturer’s inventory that includes direct and indirect materials. Also see inventory: materials.
In accounting this term means a company’s net income, which is the bottom line of the income statement.
This term is used in place of retained earnings when the balance in the retained earnings account is negative (a debit balance).
A term meaning behind, such as dividends in arrears, or something occurring at the end of a period, such as the recurring payment in an annuity in arrears.
A check that is not paid by the bank on which it is written (drawn). Often the reason a check is not paid is that the account on which the check was drawn did not have a sufficient balance. In that case the check is...
The expenses directly incurred by a nonprofit organization in providing one of its programs.
A company’s loss before nonoperating or other items. Other or nonoperating items include interest income, interest expense, and gains and losses on sale of assets used in the business, loss on lawsuit, etc.
A word to describe whether a company is able to earn more revenues than expenses.
An intangible asset reported on the balance sheet at the company’s cost (or lower). Often, successful trade names were developed by companies over many years. As a result the cost of the trade name is minimal, but...
The internal growth of a company’s existing businesses. Organic growth excludes the additional sales resulting from acquiring another company.
2001, the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, which ended the automatic amortization of goodwill to expense on the...
See endowment fund.
The British term for controller.
The compensation earned by hourly-paid employees during the interval of time indicated in the heading of the income statement. Under the accrual basis of accounting, the date that wages are paid does not determine when...
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