The amount a company owes for expenses or losses incurred that have not yet been paid nor recorded through a routine transaction. To learn more, see Explanation of Adjusting Entries.
The amount a company owes for expenses or losses incurred that have not yet been paid nor recorded through a routine transaction. To learn more, see Explanation of Adjusting Entries.
The phrase used by FASB Statement 117 that describes the required focus of a nonprofit’s external financial statements. Previously the external financial statements focused on individual funds.
See Explanation of Financial Ratios.
Benefits provided by a company to retirees. Typical examples of potential benefits are pensions, life insurance, and health insurance.
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.
See program evaluation and review technique (PERT).
See inventory: finished goods (FG).
Segments of a business. For example, a corporation may have a consumer division and an industrial division in order to improve its effectiveness in marketing its goods.
A statistical tool that uses the least-squares method to estimate the fixed and variable components of mixed costs.
The gross purchases of merchandise for resale minus purchase returns, purchase allowances, and purchase discounts.
Checks which have been written, but have not yet cleared the bank on which they were drawn. In the bank reconciliation, outstanding checks are deducted from the balance per bank. To learn more, see Explanation of Bank...
Bonds with one maturity date (as opposed to serial bond).
Long term assets that are not classified as investments, property, plant, equipment, or intangible assets. An example is bond issue costs that are amortized to expense over the life of the bonds.
A weighted average cost used with the periodic inventory system. To learn more, see Explanation of Inventory and Cost of Goods Sold.
An expectation that as a task is repeated there will be significant time reductions during the early repetitions. The time savings will dissipate after continuous performance. This is important to consider when setting...
See cost of goods sold.
See last in, first out (LIFO).
A budget that does not flex for changes in volume or activity.
A series of equal amounts occurring at the beginning of each equal time interval. Also known as an annuity due. An example would be the monthly rent on an apartment.
The sum of future amounts multiplied by their respective probabilities of occurrence.
Usually financial statements refer to the balance sheet, income statement, statement of cash flows, statement of retained earnings, and statement of stockholders’ equity. The balance sheet reports information as of...
A bearer bond is a bond that is not registered in its owner’s name. The person holding the bond is presumed to be the owner of the bond. The interest on a bearer bond is received by clipping one of the dated...
The cost of repairing or replacing previously sold products during their warranty periods.
See fixed manufacturing overhead volume variance.
See sum-of-the-years’ digits method of depreciation.
The amount of cash that could be received if a whole life insurance policy were canceled.
The preparation of financial statements from a client’s information and without any review or audit of the amounts.
A financial ratio that compares a company’s interest expense to the company’s income before interest expense and income taxes. It is an indicator of the likelihood that interest payments will be made in the...
See units of production method of depreciation.
See current ratio.
A table showing the present value factors to be applied to the constant amount occurring at the beginning of each equal time interval. Also known as the present value table for an annuity in advance.
One of the amounts used in determining the amount of interest to be capitalized when a company self-constructs certain long-term assets.
The amount of principal owed on a loan. On the typical mortgage loan, a portion of the monthly payment is applied to interest and principal. The amount of principal that remains after the principal payment is the unpaid...
A predetermined dollar amount that one unit of a finished product should cost during an accounting period.
The supplier of goods or services.
A phrase that indicates a transaction was between two independent parties and that the resulting amount is a fair representation of the value.
See current liabilities.
A company’s net income from the start of the current accounting year until a specified date. For example, the year-to-date net income at May 31, 2024 for a calendar year company is the net income from January 1,...
Current assets minus current liabilities. Also see working capital.
A method used in allocating the costs of manufacturing service departments (factory administration, maintenance, etc.) directly to the producing departments in the factory. Under this method, no service department cost...
Featured Review
"I love your PRO Plus program, I must say you've done a fantastic job creating this course. I learned more here in a few weeks, than I did in the previous 2 years with my college 'Bookkeeping' program. In fact, I was doing my final project when I realized they just did not teach me (or I did not retain) all I needed to know. Thanks to your course, I am getting ready to complete their diploma course. I plan to get my certification and start a bookkeeping business here. I was thrilled to pay for your course, well worth it. Thank You!" - Thomas G.
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: