The time required to set up a piece of production equipment.
The time required to set up a piece of production equipment.
This term is associated with preferred stock that does not allow its holders to receive more than its stated dividend. The nonparticipating feature is typical in preferred stock. To learn more about preferred stock, see...
The current liability account which reports the amount of salaries earned by a company’s employees, but which have not yet been paid by the company.
The date on which the board of directors of a corporation declares a dividend on the corporation’s stock. On this date an accounting entry is made to debit Retained Earnings and to credit Dividends Payable.
A series of equal amounts occurring at the beginning of each equal time interval. Also known as an annuity in advance. An example would be the monthly rent on an apartment.
The total of interest and principal payments required to be paid on loans payable.
A phrase used in depreciation and amortization to indicate that the expense is being allocated on a logical basis (because a cause and effect relationship does not exist).
A non-operating item resulting from the sale of this long-term asset for less than its carrying amount (or book value).
The balance in a business record such as a general ledger account.
The U.S. government agency responsible for federal income tax regulations.
A contra liability account arising when the proceeds of a note payable is less than the face amount of the note. The debit balance in this account will be amortized to interest expense over the life of the note.
The amounts reported on the income statement. Because of accrual accounting the net income flows will be different from the cash flow.
This term is used in place of retained earnings when the balance in the retained earnings account is negative (a debit balance).
The current price for a commodity or other item to be delivered immediately.
A term meaning behind, such as dividends in arrears, or something occurring at the end of a period, such as the recurring payment in an annuity in arrears.
An asset’s cost that has been assigned to Depreciation Expense.
An interest rate that is not explicit. For example, if a business lends its majority owner $100,000 at 0% interest, the IRS might determine that a fair interest rate would be 6% and not 0%. The IRS will impute interest...
The party who delivered its goods to another party (consignee). The objective is for consignee to sell the goods for the consignor. Also see consigned goods.
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.
The exchange or trade-in of a long-term asset for a similar long-term asset. For example, trading the old delivery truck for a new delivery truck; trading a two-family rental unit toward an eight-family rental unit.
This is an administrative expense which reports the fees incurred by a company for the expenses associated with its checking account transactions.
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.
A term that describes the steps when processing transactions (analyzing, journalizing, posting, preparing trial balances, adjusting, preparing financial statements) in a manual accounting system. Today many of the steps...
Sometimes used as a heading in place of paid-in capital.
Long-term assets including property, plant, equipment and intangible assets. Buildings, furnishings, fixtures, office equipment, and vehicles are common examples of long-lived assets which are depreciated by nonprofit...
See old-age, survivor, and disability insurance (OASDI).
An allocation of indirect costs based on the units of production, the number of machine hours, the number of labor hours, etc.
The difference between the call price of a bond or preferred stock and its stated or par value.
The term used by manufacturers to indicate that its manufacturing overhead applied or assigned to its output is less than the amount actually incurred.
The ratio of total liabilities to total assets. For example, a company with total assets of $800,000 and total liabilities of $200,000 will have a debt ratio of 0.25 to 1, or 25% ($200,000 divided by $800,000).
The interest rate specified or stated in a note payable or in a bond payable. Often this rate is fixed and will not change during the life of the note or bond.
A balance sheet line to report short-term liabilities that are too insignificant to be identified separately.
One of the types of donor-imposed temporary restrictions. An example of a purpose restriction is a cash donation with a donor-imposed requirement that the money be used only to purchase a vehicle for one of its programs....
Assigning manufacturing overhead costs to products being manufactured by using a manufacturing overhead rate.
A corporation’s reported net income and earnings per share for a three-month period.
Also referred to as draws. These are a reduction of owner’s equity, but are not a business expense and they do not appear on the sole proprietorship’s income statement.
A document issued to a customer by a seller which reduces the seller’s accounts receivable and its net sales. It also reduces the buyer’s accounts payable and net purchases. A document issued by a bank that...
The result of subtracting all variable expenses from revenues. It indicates the amount available from sales to cover the fixed expenses and profit.
See next-in, first-out cost flow assumption (NIFO).
In the equation of a straight line, y = a + bx, ‘bx’ is the total variable cost resulting from the variable cost rate ‘b’ multiplied times the quantity ‘x’.
Featured Review
"I have been in accounting for 20 years and had questions while changing industries. AccountingCoach was such a valuable tool helping me understand those things I had forgotten or was not exposed to during my career. The teaching, tests, puzzles and study material are an excellent way to learn or brush up on your accounting skills. Before finding AccountingCoach, I looked into purchasing books to assist me in the questions I had. The books would have cost me 5 times the amount it cost to join AccountingCoach and I got more content and material than I would have purchasing 3 books. I recommend AccountingCoach to anyone wanting to learn, brush up on their accounting skills or might be opening up a small business. It's an excellent way to understand accounting at your own pace." - Denise B.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviewsWe now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: