Long-term assets that are reported under the classification of property, plant, and equipment on a company’s balance sheet. These assets are depreciated over their useful life.
Long-term assets that are reported under the classification of property, plant, and equipment on a company’s balance sheet. These assets are depreciated over their useful life.
The actual cost incurred for manufacturing costs other than direct materials and direct labor which increase as production volume increases. Examples include manufacturing supplies and electricity to operate the...
An employee fringe benefit provided by an employer that allows employees to be absent from work with pay. Often the number of paid vacation days allowed is based on the number of years of employment.
See direct labor rate variance.
The balance of the owner’s capital account excluding the current year’s net income and current year’s draws by the owner.
See direct labor efficiency variance.
The products with significant value that emerge at a split-off point in a process. When a joint product has little value it is referred to as a by-product.
The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.
See direct labor efficiency variance.
Manufacturing costs other than direct materials and direct labor. To learn more about manufacturing overhead, see our Manufacturing Overhead Outline.
The result of subtracting total liabilities from total assets. It is also the term used by not-for-profit organizations instead of owner’s equity or stockholders’ equity. To learn more see our Explanation of...
The depreciation computed for financial reporting purposes—as opposed to income tax depreciation. To learn more, see Explanation of Depreciation.
Accounting reports that identify the differences between standard costs and actual costs, between budget amounts and actual amounts, etc.
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 mathematical result of sales revenues divided by average total assets during the period of the sales.
The first major section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
This is a national organization of certified public accountants. For more information go to www.aicpa.org.
This classification of net assets has been replaced by the FASB with the classification net assets with donor restrictions.
The amount of vacation that an employee has earned but has not yet taken.
Financial statements issued between the official annual financial statements. For example, quarterly financial statements are interim financial statements.
A form used at a bank to inform its customer that the customer’s account is being reduced for a fee or other charge.
A symbol that indicates the variable cost rate and also the slope of a straight line. For example, in the equation of the straight line, y = a + bx, ‘b’ represents the variable cost rate per unit of...
A long-term asset account reported on the balance sheet under the heading of property, plant, and equipment. Included in this account would be copiers, computers, printers, fax machines, etc.
These pronouncements were issued by the Committee on Accounting Procedures of the American Institute of Certified Public Accountants during the years 1953 to 1959. They were and are part of the generally accepted...
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.
Receivables due from customers. See accounts receivable.
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...
See direct materials usage variance.
The most common method of preparing the statement of cash flows. Under this method the starting point is the net income reported on the income statement. To learn more, see Explanation of Cash Flow Statement.
Goods sold by a retailer, wholesaler, distributor, manufacturer, etc.
Using debt in order to control more assets. Also known as financial leverage.
A lease where the lessee/tenant pays not only rent, but also the property taxes, insurance, and maintenance.
The estimated scrap value at the end of the useful life of an asset used in the business. It is also referred to as residual value.
A publication by the U.S. Internal Revenue Service (IRS) to assist employers with federal payroll taxes. The complete title of the publication is Publication 15 (Circular E), Employer’s Tax Guide. It is available...
Factors that are used to convert future cash flows to their present value.
A nongovernment group of seven members assisted by a large research staff which is responsible for the setting of accounting standards, rules, and principles for financial reporting by U.S. entities. Go to www.fasb.org...
A liability account in a bank’s general ledger that indicates the amounts owed to bank customers for the balances in the customers’ individual checking, savings, and certificate of deposit accounts.
See double declining balance method of depreciation.
The contra asset account which accumulates the amount of Depreciation Expense taken on Equipment since the equipment was acquired. As a contra asset account it will have a credit balance.
A corporation’s own stock that has been repurchased from stockholders. Also a stockholders’ equity account that usually reports the cost of the stock that has been repurchased.
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