An expense outside of a company’s main operating activities of buying and selling merchandise or providing services. For example, interest expense is a nonoperating expense.
An expense outside of a company’s main operating activities of buying and selling merchandise or providing services. For example, interest expense is a nonoperating expense.
The amount of an asset’s cost that will be depreciated. It is the cost minus the expected salvage value. For example, if equipment has a cost of $30,000 but is expected to have a salvage value of $3,000 then the...
An accounting year that ends on a date other than December 31. For example, a school district might have a fiscal year of July 1, 2023 through June 30, 2024. A retailer might have a fiscal year consisting of the 52 or 53...
See net operating income (NOI).
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 term often used in present value calculations to distinguish a one-time cash amount from an annuity (or series of equal payments).
See consistency.
The amount received from the sale of an asset, from the issuance of bonds or stock, or from a bank loan.
See debenture bond.
The person that owes money. If a bank lent you money, the bank is the creditor and you are the debtor.
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.
A term used when referring to property, plant, and equipment. Fixed assets other than land are depreciated.
See Accounting Principles Board.
The amount that a bank commits to lend a borrower during a specified purpose.
See uncleared check.
See economic order quantity (EOQ) model.
The number of years needed to recover the cash amount invested in a project. The calculation uses cash flows rather than accounting income flows. Generally the cash flows are not discounted to reflect the time value of...
The additional revenues from an additional quantity. It is similar to marginal revenue, except that marginal revenue refers to the revenue from the next unit. Incremental revenue might be the additional revenues from 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...
See warranty liability.
The next best benefit foregone. The opportunity lost. Often measured as the contribution margin given up by not doing an activity. For example, if a sole proprietor is foregoing a salary and benefits of $50,000 at...
The chief accounting officer of a company. This person would head up the accounting department.
The length of time that an asset would last. Instead of the physical life, accountants focus on the useful life. For example, a computer’s physical life is perhaps 50 years. However, its useful life is likely to be...
A legal entity organized under state laws that is considered separate from its owners. Ownership is evidenced by shares of stock.
See uncleared check.
Form 990 is the Internal Revenue Service (IRS) form entitled Return of Organization Exempt from Income Tax. This federal form must be filed annually by tax exempt organizations. However, some organizations such as...
In regression analysis this is a statistic (designated as r-squared) indicating the percentage of the change occurring in the dependent variable that is explained by the change in the independent variable(s). The percent...
Under the accrual basis of accounting this income statement account reports the amount of commissions expense that pertains to the revenues earned by the company during the accounting period shown in the heading of the...
A heading that includes common stock and preferred stock.
See chief operating officer.
A document filed when a corporation is formed. Among other things, it lists the number of shares of stock that the corporation is authorized to issue.
This term is used in several ways. Some use the word interchangeably with revenues. Others use the word to signify a net amount, such as income from operations (revenues minus expenses in the company’s main...
A current asset that reports the amount paid for dues that have not yet expired. As the prepaid dues expire, the account Prepaid Dues is reduced and dues expense is increased.
The current liability account which reports the amount of salaries earned by a company’s employees, but which have not yet been paid by the company.
Usually the pay for the hours worked in excess of 40 hours per week. Federal laws require payment for these hours for employees who are not able to control their hours. For example, a company is required to pay a...
What is a common carrier? A common carrier is a business that transports goods for other companies, organizations, or individuals. The common carrier is responsible for any loss associated with the transport of the...
Featured Review
"I am currently working for a Pharmacy Benefits Management company (PMB). I discovered AccountingCoach when I was in college going through the accounting program. Sometimes in school, the concepts weren't always clear to me, or I just needed a concise refresher on certain accounting topics. AccountingCoach fulfilled both of these needs for me. I became a PRO user because I found value in the additional resources I received. It really helped me to solidify my understanding of the accounting process. I like the materials on AccountingCoach because of the clarity and conciseness of the information. I find myself wanting to brush up on things from time to time, and because of the format of the AccountingCoach platform, I'm able to quickly find what I need. I have benefited from the materials both academically and professionally. In school, I did well in my courses, and I know that using AccountingCoach contributed to my success. Professionally, I have felt confident in communicating with my coworkers regarding accounting concepts, which has in turn helped me to progress in the company. Sometimes when I’m working, I reference the templates provided on AccountingCoach to guide my work. I will be using this site for years to come!" - M.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: