Actual changes in cash as opposed to accounting revenues and expenses.
Actual changes in cash as opposed to accounting revenues and expenses.
Scrap or waste that should have been avoided. In other words, abnormal spoilage is the amount that is over and above the normal amount that is expected in a production process.
See limited liability company.
See mixed expenses.
A long-term asset account that reports a company’s cost of automobiles, trucks, etc. The account is reported under the balance sheet classification property, plant, and equipment. Vehicles are depreciated over...
Spoilage or waste that is likely to occur and cannot be avoided at a reasonable cost.
Sending merchandise to another party (an agent, consignee) in order to sell the merchandise. Also see consigned goods.
Under accrual accounting an item has been “earned” and is reported as revenue when a service has been performed or the ownership to a product has been transferred from the seller to the buyer (not when cash...
See not sufficient funds check.
A status granted by the U.S. Internal Revenue Service (IRS) to nonprofits applying and meeting certain conditions. This status means that the nonprofit organization is not subject to federal income taxes. It also means...
An amount remaining after another amount is subtracted. In the accounting equation, owner’s equity is the residual of assets minus liabilities.
In standard costing the difference between the actual cost and the standard cost of direct materials or direct labor. The price variance of direct labor is usually referred to as the labor rate variance.
See separation of duties.
A right to buy a specific number of shares of stock at a specific price by a specific date.
An employee that must be paid overtime pay when the employee’s weekly hours exceed 40 hours. Some states may have additional requirements. Nonexempt employees include both hourly-paid and salary-paid who are not...
An abbreviation for the word account.
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).
Another word for purchasing.
A balance on the right side (credit side) of an account in the general ledger.
Is it acceptable for companies to use two methods of depreciation? Definition of Depreciation Methods There are various methods of depreciating assets that are used in a business. It is acceptable and common for...
Someone who performs a task for a company, but is not an employee. The IRS has criteria to assist in distinguishing between an independent contractor and an employee.
See International Accounting Standards Board (IASB).
The sum of future amounts multiplied by their respective probabilities of occurrence.
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.
A current liability account that reports the amounts owed to employees for hours worked but not yet paid as of the date of the balance sheet.
A term used with standard costs to report a difference between actual costs and standard costs. To learn more, see Explanation of Standard Costing.
A budget that does not flex for changes in volume or activity.
To repurchase bonds that the company had previously issued.
The gross amount of purchases minus the amount of purchase returns, purchase allowances, and purchase discounts.
A form of business entity having partners. (Consult with an attorney about this form of entity versus alternatives.)
See Explanation of Standard Costing.
Usually a claim on an asset that is pledged as collateral. The lien is usually filed with a government office.
The record of checks issued or written, deposits, bank charges, bank credits and the resulting balance. Also referred to as the check register.
The long term asset category of a classified balance sheet which appears immediately after the current assets. Listed in this category would be a bond sinking fund, funds held for construction, the cash surrender value...
An item that is dependent on another item. For example, your wages would be a dependent variable and the hours you work would be the independent variable. This relationship is often expressed as y = a + bx, where y is...
The change in total costs in response to the change in some activity. For example, some of the costs of owning and operating a vehicle will increase in total with an increase in miles driven. These are referred to as...
Costs that have both a fixed and variable component. For example, the cost of operating an automobile includes some fixed costs that do not change with the number of miles driven (e.g., operating license, insurance,...
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...
See budgetary slack.
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