A corporation with a limited number of stockholders and whose stock is usually not publicly traded.
A corporation with a limited number of stockholders and whose stock is usually not publicly traded.
Inventory that is less than the expected amount. It might be associated with theft or damage.
Financial Statements Video Training Part 12 Statement of cash flows: introduction, cash flows from operating activities Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your...
Preferred stock that can be exchanged by the holder for a specified number of shares of common stock of the same company.
The benefit foregone by choosing another course of action. Also known as the opportunity cost. The lost opportunity is sometimes measured by the lost contribution margin (sales minus the related variable costs).
A listing of the materials included in a product. A bill of material could be thought of as a bakery’s recipe for producing one of its products.
In accounting this term means a company’s net income, which is the bottom line of the income statement.
Sometimes used as a heading in place of paid-in capital.
A company’s income statement which reports each item as a percentage of net sales.
The symbol for the number of units of product, number of machine hours, or other indicator of activity or volume as shown in the equation of the cost line y = a + bx.
In accounting this refers to the multiplication of quantity times price, or number of units times price or cost per unit.
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
An employee fringe benefit provided by an employer that allows employees to be paid for a limited number of days per year when the employees are ill.
How do you account for the rebate on an automobile? The rebate on the purchase of an automobile should be recorded as a reduction of the automobile’s cost. The lower automobile cost will result in lower depreciation...
Market interest rate, current return, effective interest rate. Also see yield to maturity.
An income statement account used to record the amount that the asset Inventory is reduced during the accounting period because the net realizable value of the inventory is less than its cost.
A retirement plan that specifies the amount that a retiree will receive, such as 1% of the person’s recent salary times the years of service. The employer’s obligation is to contribute enough money to meet...
A term that refers to a negative checking account balance. It arises when a company writes checks in excess of the amount it has on deposit in its checking account.
The gross purchases of merchandise for resale minus purchase returns, purchase allowances, and purchase discounts.
Operating expenses made to return an asset to its previous condition (rather than to make the asset more than it was originally). The amount is charged to an account such as Repairs and Maintenance Expense in the period...
The amounts in a company’s bank account that are not yet accessible because the checks deposited into the account have not yet cleared the bank on which they were drawn.
A budget that does not flex for changes in volume or activity.
See Explanation of Inventory and Cost of Goods Sold.
Advertising Expense is the income statement account which reports the dollar amount of ads run during the period shown in the income statement. Advertising Expense will be reported under selling expenses on the income...
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...
A term to mean the company’s general ledger or accounting records.
A stated legal amount often appearing on preferred stock, bonds, and some common stock.
To learn more, see our Financial Ratios Outline.
A current asset representing amounts paid in advance for future expenses. As the expenses are used or expire, expense is increased and prepaid expense is decreased.
A loan from a bank or other lender in which the borrower has pledged an asset as collateral in case the loan cannot be repaid in full.
The inability to pay liabilities as they become due. Some consider a company to be insolvent when its current liabilities exceed its current assets.
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 cost of telephone service that was used during the period shown on the income statement.
A tax status allowed by the U.S. Internal Revenue Service.
A corporation’s net income after income taxes minus the dividends pertinent to the preferred shares of stock (if any).
A term used to describe checks written by a company that have been received and paid by the bank on which they were drawn or written. The check number and amount will appear on the company’s checking account...
The amount in a bank account according to the bank’s records.
The activities provided by a nonprofit in carrying out one of its major programs.
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