See present value of an annuity due table, present value of an ordinary annuity table, and present value of 1 table.
See present value of an annuity due table, present value of an ordinary annuity table, and present value of 1 table.
Future amounts that have been discounted to the present.
Same as book value. For example, an asset’s net book value is equal to the asset’s cost minus its accumulated depreciation.
The stated legal amount appearing on bonds.
Billing a client based on the value of the information or service provided rather than billing based on time spent.
Factors that are used to convert future cash flows to their present value.
The sum of future amounts multiplied by their respective probabilities of occurrence.
What is value billing? Value billing is a way of billing a client for services provided. Basically, the amount billed is based on the value of the service (or information) instead of the number of hours spent. The...
A stated legal amount often appearing on preferred stock, bonds, and some common stock.
What is scrap value? Definition of Scrap Value In cost accounting, scrap value refers to a relatively insignificant amount that a manufacturer receives from the sale of production materials that remain after the...
The net result of combining the discounted cash inflows and the discounted cash outflows of an investment, project, company, etc.
A term used to describe the net present value method and the internal rate of return. The model discounts future cash flows back to the present time.
Stock without a par value.
See carrying amount.
The book value of an asset is the amount of cost in its asset account less the accumulated depreciation applicable to the asset. The book value of a company is the amount of owner’s or stockholders’ equity....
The remainder or difference. In depreciation the residual value is the estimated scrap or salvage value at the end of the asset’s useful life. In the accounting equation, owner’s equity is considered to be...
The discounted value of a series of equal amounts occurring at future points with equal time intervals.
The recognition that a dollar in the present is more valuable than a dollar in the future. Present-value calculators and present-value tables assist in converting future dollars to the present value in order to make a...
See net realizable value.
Our Explanation of Accounting Principles provides you with clear and concise descriptions of the basic underlying guidelines of accounting. You will see how the accounting principles affect the balance sheet and income...
to as the corporation’s __________. Select... creditors debtors investors 16. The book value of a corporation is equal to its __________ __________. Select... liquidation value market value stockholders' equity...
of a bank building was $10 million and was fully depreciated during its first 30 years of use. The cost principle requires the depreciation expense on the bank’s income statement for year 31 (and each year thereafter)...
What are the journal entries for a stock split? Definition of a Stock Split A stock split usually increases the number of shares of a corporation’s common stock with the intention of reducing the market price of each...
value that can be measured Assets are recorded at their cost and (except for some securities) are not adjusted for changes in market value. Long-term assets such as buildings and equipment are depreciated and therefore...
An interest rate that is not explicit. For example, if a business lends its majority owner $100,000 at 0% interest, the IRS might determine that a fair interest rate would be 6% and not 0%. The IRS will impute interest...
A written opinion of an independent certified public accountant that a company’s financial statements are a fair representation of the company’s financial performance and financial position. The...
on the income statement over the asset’s useful life. Accountants point out that depreciation is an allocation process which does not result in reporting the asset’s market value. Example of Recording Depreciation...
A stock split, such as a 2-for-1, means that every stockholder will have twice as many shares as was held previously. Accordingly, the market price per share after the split should be one-half of the market price...
What is net realizable value? Definition of Net Realizable Value Net realizable value (NRV) is the cash amount that a company expects to receive. Hence, net realizable value is sometimes referred to as cash realizable...
The discounted value of a series of equal amounts occurring at the beginning of each equal time interval.
A table of factors that shows what the future value of $1 will grow to if invested at the rate shown in the column heading and compounded for the number of periods indicated in the row.
What is net present value? Definition of Net Present Value Net present value is the combination of 1) the present value of cash inflows, and 2) the present value of the cash outflows. To arrive at these present value...
A method used by retailers for estimating the cost of ending inventory without tracking the individual units of product.
The discounted value of a single future amount. To learn more, see our Present Value of a Single Amount Outline.
A stated legal amount for each share of preferred stock. The par value for every share of preferred stock issued must be recorded in the separate stockholders’ equity account Preferred Stock.
The amount that a recurring equal amount deposited at the end of each period will grow to under compounded interest. An ordinary annuity is also known as an annuity in arrears.
The amount that a recurring equal amount deposited at the beginning of each period will grow to under compounded interest. An annuity due is also known as an annuity in advance.
What are the ways to value inventory? Definition of Valuing Inventory Generally, the financial statements of a U.S. company must report its inventory at its historical cost (not at its selling prices). Inventories are to...
Future Value of a Single Amount For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. For fill-in-the-blank questions, press or click on the blank space...
A table showing present value factors for various interest rates and numbers of years/periods for a single amount at a future point in time.
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