Why is inventory turnover important? Definition of Inventory Turnover A company’s inventory turnover is often expressed as the company’s cost of goods sold for a year divided by the average cost of inventory during...
Why is inventory turnover important? Definition of Inventory Turnover A company’s inventory turnover is often expressed as the company’s cost of goods sold for a year divided by the average cost of inventory during...
of $0 on an income statement prepared using the accrual method of accounting. The break-even point expressed in dollars of revenues is calculated by dividing the company’s total fixed expenses for the accounting...
or Practice Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page. 1. FICA consists of 1) the __________ __________ tax, and 2) the __________ tax. 2. The gross...
working capital is $30,000. Current Ratio The current ratio is calculated as current assets divided by current liabilities. If a corporation has $150,000 of current assets and $120,000 of current liabilities, its...
Should a company focus on cash flows or accounting profits when making a capital expenditure decision? Using the incremental cash flows and discounting them to reflect the time value of money is the preferred method. The...
, and the company’s required profit. Assume that the final amount is $240,000. The customer wants the house, but believes there is a little “wiggle room” in the $240,000. The company and the customer go back and...
What is the income statement? Definition of Income Statement The income statement is also known as the statement of operations, profit and loss statement, and statement of earnings. It is one of a company’s main...
The costs that should have occurred for the actual good output are known as standard costs, which are likely integrated with a manufacturer’s budgets, profit plan, master budget, etc. The standard costs involve the...
What is the cash flow statement? Definition of Cash Flow Statement The cash flow statement (officially known as the statement of cash flows) is one of the required financial statements issued by U.S. businesses (and by...
, capital budgeting for expanding operations, standard costing and the reporting of variances, transfer pricing, etc. Special analyses includes cost behavior, cost-volume-profit relationships, make or buy decisions,...
purchased and the company’s standard cost per pound for the raw materials that were purchased. (The standard cost per pound is the cost that the company expected to pay for the year and was included in the company’s...
What is opportunity cost? Definition of Opportunity Cost Opportunity cost is the profit that was lost or missed because of some action or failure to take some action. Some refer to opportunity cost as opportunity lost....
rates instead of just one plant-wide overhead rate. Example of Predetermined Overhead Rate Prior to the start of the accounting year, JKL Corp calculates the predetermined annual overhead rate to be used in the new...
, the businesses are referred to as profit centers. If the operating businesses make their own investment decisions, the businesses are referred to as investment centers. The production and administrative departments...
be allocated to the resulting 90 lots in a meaningful way so that the developer can report the profit of selling two residential lots and the largest of the business lots. The basis for the allocation is likely to be...
, our Net Sales and our weekly profit, I immediately made an entry to debit Discount for Shrinkage (a contra account to Sales) and a credit to Provision for Discounts (a contra account to Accounts Receivable). By...
. These costs are partially fixed and partially variable. Understanding how costs behave is important for management’s planning and controlling of its organization’s costs, and for cost-volume-profit analyses...
with the accrual basis of accounting Fixed asset accounting Cost accounting Budgeting and profit planning, and more Common titles for accountants include corporate accountant, chief accountant, controller, assistant...
a profit for the company’s owners. If a company never has inventory at the end of the accounting periods, the allocation of manufacturing overhead could be avoided. The reason is that all of the manufacturing costs...
, labor, and manufacturing overhead. Some manufacturers use standard costs in their accounting system. The term price is used when referring to the amount that a seller has established for its products. Accountants might...
will include preparing the following projections for the next accounting year: Amounts for sales Amounts for producing goods Amounts for each department’s expenses Summarizing the above budgets into a master budget or...
and low-cost training for these important tools through an Internet search. After you have mastered the materials on AccountingCoach and have become familiar with QuickBooks, strive to find a business, bookkeeping...
. The early payment discount is also referred to as a purchase discount or cash discount. If the company pays the supplier’s invoice within 10 days, there are two ways to record the early payment discount of $280:...
What is net working capital? Definition of Net Working Capital Net working capital is the amount (as opposed to being a ratio) remaining after subtracting a company’s total amount of current liabilities from its total...
important because of its effect on the following: Cost of goods sold for more than one accounting period The amount of a company’s current assets The company’s working capital The company’s current ratio Join PRO...
Our Explanation of Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
of the working capital calculation. Accounts payable also affects the current ratio, which is current assets divided by current liabilities. 2. The three-way match confirms there is agreement of the information in the...
__________ __________ as volume changes. Select... in total per unit 26. The __________ __________ is defined as revenues minus variable costs. Select... contribution margin gross profit opportunity cost Match one of...
Our Explanation of Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
for ordering a larger quantity. Select... True False 13. The EOQ model can result in additional profit without the need for capital expenditures. Select... True False 14. The costs used in the EOQ model are the...
on a project. There are two weaknesses with the payback method: 1) the time value of money is not considered, and 2) the cash flows occurring after the cash is paid back is ignored. Accounting rate of return or return...
the standard cost per pound (or some other unit of measure such as gallons, liters, etc.) Variances direct management’s attention to areas where the company’s operations are deviating from the company’s budgets...
Our Explanation of Payroll Accounting discusses the taxes and benefits which are withheld from employees' pay as well as the taxes and benefits that are expenses for the employers. Also provided are examples of the...
the employee worked four 8-hour days and one 10-hour day. Assuming that overtime is paid at a rate of time and one-half, the employee’s total gross pay for the week is $__________. 8. The amount of each employee’s...
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