See direct labor rate variance.
See direct labor rate variance.
A non-operating item resulting from the sale of this long-term asset for less than its carrying amount (or book value).
Actions taken or not taken prior to issuing financial statements in order to improve the amounts appearing in the financial statements.
Long term assets that are not classified as investments, property, plant, equipment, or intangible assets. An example is bond issue costs that are amortized to expense over the life of the bonds.
The entry made in a journal. It will contain the date, the account name and amount to be debited, and the account name and amount to be credited. Each journal entry must have the dollars of debits equal to the dollars of...
See present value of an annuity due table, present value of an ordinary annuity table, and present value of 1 table.
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.
Net sales revenues minus the cost of goods sold.
A revenue account that reports the sales of merchandise. Sales are reported in the accounting period in which title to the merchandise was transferred from the seller to the buyer.
Raw materials that are a traceable component of a manufactured product. For example, the direct material of a baseball bat is the wood. Flour, sugar, and vegetable oil are direct materials of a company that manufactures...
This loss is not an extraordinary item, since it is not unusual in nature. However, it can appear as a separate line item in the main portion of the income statement. It will be reported at its gross amount (not net of...
Assets associated with depreciation. Examples include buildings, equipment, furniture, fixtures, trucks, automobiles, etc.
A company might construct a building and then sell the building to an investor who in turn leases the building back to the company.
A payment. The expenditure might be for a significant long term asset (capital expenditure), a short term asset (prepaid insurance), a reduction in a liability, or for an immediate expense such as rent.
Earnings are said to be of a high quality if the accounting policies are conservative. One indication is that the cash flows from operating activities shown on the statement of cash flows consistently exceed the amount...
An accounting principle/guideline that allows the accountant to keep the sole proprietor’s business transactions separate from the owner’s personal transactions even though a sole proprietorship is not...
A lien on real estate to protect a lender. The loan made with such security is referred to as a mortgage loan.
See direct labor efficiency variance and direct labor rate variance.
Also referred to as real accounts. Accounts that do not close at the end of the accounting year. The permanent accounts are all of the balance sheet accounts (asset accounts, liability accounts, owner’s equity...
Part of stockholders’ equity representing the fair market value of an asset at the time it was received as a gift. For example, a corporation may be given a large tract of land from a community if the corporation...
The current price for a commodity or other item to be delivered immediately.
Additions or changes to a rented building that are made by the tenant rather than by the landlord. The tenant will record the cost of these changes in the long term asset account Leasehold Improvements. The cost of these...
Under accrual accounting an item has been “earned” and is reported as revenue when a service has been performed or the ownership to a product has been transferred from the seller to the buyer (not when cash...
The situation where a company has assigned less manufacturing overhead than the amount actually incurred.
See direct labor efficiency variance and variable manufacturing overhead efficiency variance.
In some countries turnover refers to sales. Turnover is also associated with some financial ratios such as the inventory turnover ratio, the accounts receivable turnover ratio, and asset turnover ratio.
Also referred to as the current interest rate, the yield-to-maturity, and the effective interest rate. The market interest rate is always changing whereas the stated interest rate does not change.
An expectation that as a task is repeated there will be significant time reductions during the early repetitions. The time savings will dissipate after continuous performance. This is important to consider when setting...
A report prepared by a professional appraiser with detailed information on the calculation of an asset’s current market value.
A loss from holding an asset and the loss has not yet been reported in the financial statements.
Financial Statements Video Training Part 13 Statement of cash flows: cash flows from operating activities, cash flows from investing activities, cash flows from financing activities, quality of earnings Must-Watch Video...
A shortened version of the term bank reconciliation or bank statement reconciliation.
The symbol that represents the total cost in the equation of the cost line y = a + bx.
A current asset account that represents an amount of cash for making small disbursements for postage due, supplies, etc.
An amount remaining after another amount is subtracted. In the accounting equation, owner’s equity is the residual of assets minus liabilities.
A balance sheet heading or grouping that includes both cash and those marketable assets that are very close to their maturity dates.
Work-in-progress is the long-term asset account that is used to report the amounts spent on the construction of buildings and equipment until the asset is completed and put into service.
The amount of wages and related expenses that have been incurred by the employer (and earned by the employees) but have not yet been paid.
See common-size balance sheet and common-size income statement.
Using debt (such as loans and bonds) to acquire more assets than would be possible by using only owners’ funds. Also referred to as trading on equity.
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