Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
in cash of $5,900. Hence, the positive adjustment of $900 converts the accrual accounting net income of $5,000 to be the cash amount of $5,900. An Increase in Accounts Payable is Favorable for a Company’s Cash Balance...
See Explanation of Standard Costing.
See Explanation of Standard Costing.
Budgetary slack means providing a cushion in a budget in order to avoid an unfavorable variance at the end of the budget year. The budgetary slack might be achieved by entering budget expense amounts that are larger than...
To assign or allocate on a logical basis. For example, the materials price variance in a standard costing system is prorated to the following categories: materials inventory, work-in-process inventory, finished goods...
variances and will be recorded in separate variance accounts. Any balance in a variance account indicates that the company is deviating from the amounts in its profit plan. While standard costs can be a useful...
are considered to be liquidity ratios: Current ratio Quick ratio or acid test ratio The amount of a company’s working capital is also cited as an indicator of liquidity. However, a company with a large amount of...
that depreciation expense will beat its budget by $4,000 ($44,000 of actual depreciation versus the annual budget of $48,000). This favorable $4,000 is the controller’s cushion. The idea is that this will cushion the...
are converted to cash in a timely manner. For example, if a company can better manage its inventory and its accounts receivable, the company’s cash and liquidity will increase. This in turn improves the company’s...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
a positive or favorable effect on the corporation’s cash balance A negative amount on the SCF means: a cash outflow cash was used it was not good for the corporation’s cash it had a negative or unfavorable effect on...
! Interest expense is an expense associated with the financing function and is not considered part of the manufacturing function. 4. Which would be the least favorable basis for allocating manufacturing overhead for a...
Accounting Topics Managerial accounting topics often include: Job order costing Process costing Absorption costing vs. variable costing Understanding cost behavior and cost-volume-profit analysis Operational budgeting...
, this more favorable sales mix (15-45-40 instead of 20-50-30) could result in an operating profit (instead of the planned loss) even with 5,000 fewer units sold. Join PRO to Track Progress Mark the Question as Read...
in previous years and to other companies in the same industry. Even with a favorable inventory turnover ratio, a company may have some excess and obsolete inventory items. Therefore, it is wise to compare the...
the contribution margin to be reduced. With less contribution margin, the company will need more sales to cover its fixed expenses. A reduction in the contribution margin caused by a decrease in selling prices. A less...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
is the carrying amount or book value of the main account. An adjunct account might be referred to as a valuation account. Example of Adjunct Account Assume that a corporation issued bonds with a maturity value of...
Our Explanation of Working Capital and Liquidity provides you with an in-depth look at the components of working capital and the challenges of converting current assets to cash before obligations come due. You will see...
amounts as favorable or unfavorable__________. 8. Management by __________ has its focus on the deviations from the expected amounts. 9. A budgeted financial statement is sometimes referred to as a pro-__________...
ratio will be __________ favorable than if the company had used FIFO. Select... less more 21. The use of LIFO during periods of increasing costs will mean a company’s profitability ratios will be __________ favorable...
$20,000 of the goods that it had sold. This is good for a company’s liquidity. Since a decrease of $20,000 in inventory is favorable or positive for the company’s cash balance and its liquidity, the decrease in...
be favorable from a Cash point of view. If Income Taxes Payable increased, the company did not pay the entire amount of Income Tax Expense shown on the income statement. Since the starting point in the operating...
that shows the adjustments to most of a company's working capital accounts is the cash flows from __________ activities. Financing Wrong. Investing Wrong. Operating Right! 23. Does an amount in parentheses on the...
activities section of the statement of cash flows using the indirect method. Mark as wrong Mark as right positive amounts (or) amounts not in parentheses On the statement of cash flows these amounts represent cash...
Our Explanation of Improving Profits will assist you in focusing on the costs and revenues that are relevant (and ignoring those which are not relevant) for improving profits and eliminating losses. Examples of the...
Since our Explanation of Cash Flow Statement illustrates how the amounts are determined, you will get a better understanding of this very important financial statement. No longer will you look at only the income...
of the page. 1. Which of the following should be associated with the term debit? Select... Bad or unfavorable Good or favorable Left side of an account Right side of an account View Coaching In bookkeeping and...
Our Explanation of Accounts Receivable and Bad Debts Expense helps you understand the accounting for the losses associated with selling goods and providing services on credit. You will understand the impact on the...
Our Explanation of Financial Ratios includes calculations and descriptions of 15 financial ratios. As you calculate the financial ratios you will also gain a deeper understanding of a company's operations and financial...
in accounts receivable is reported as a positive amount on the SCF. The positive amount is shown as an adjustment to the amount of net income listed in the operating activities section of the SCF. Viewed another way,...
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