Usually a change in the estimated useful life of an asset or a change in the estimated salvage value. The change usually causes a change in the depreciation expense for the current year and subsequent years. The...
Usually a change in the estimated useful life of an asset or a change in the estimated salvage value. The change usually causes a change in the depreciation expense for the current year and subsequent years. The...
The United States Internal Revenue Code which contains the federal laws and regulations pertaining to federal taxes.
The record of checks issued or written, deposits, bank charges, bank credits and the resulting balance. Also referred to as the check register.
The cash amounts received after deducting the related income taxes and also the cash amounts paid after deducting the cash saved when the amounts are income tax deductible.
A phrase used in reconciling the bank statement. It refers to the ending balance shown on the bank statement.
A restricted asset for the purpose of retiring a bond.
Scrap or waste that should have been avoided. In other words, abnormal spoilage is the amount that is over and above the normal amount that is expected in a production process.
See discounted cash flow model.
Also referred to as manufacturing overhead, factory overhead, indirect manufacturing costs, or manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
Under the accrual method of accounting, this account reports the employer’s expense for the company’s pension plan during the period indicated in the heading on the income statement. Information on pensions...
Sending work to another organization instead of processing the work in-house. Often payroll is outsourced to a company that specializes in payroll processing.
See straight-line method of depreciation.
The amount by which actual costs exceed the standard costs or budgeted costs. Also, the amount by which actual revenues are less than the budgeted revenues.
That part of the accounting system which contains the balance sheet and income statement accounts used for recording transactions.
See FOB destination and FOB shipping point.
Activities that are not specifically associated with a specific product or customer. For example, the costs of an audit and filing information with government agencies are examples of organization-sustaining activities.
A word used by accountants to communicate that an expense has occurred and needs to be recognized on the income statement even though no payment was made. The second part of the necessary entry will be a credit to a...
A book of original entry that requires that both the account being debited and the account being credited be listed along with the respective amounts. Because of accounting software and special journals there are...
The amount before deductions. For example, gross pay is the amount before withholding deductions. Gross sales is the amount before sales returns and allowances and sales discounts.
Corporations whose stock is traded on stock exchanges. Also referred to as publicly-traded corporations.
Sales made on account. Sales where the customer is allowed to pay at a later date. Noncash sales.
A tax imposed on income earned by a nonprofit that is unrelated to its exempt purpose.
A payment toward the amount of principal owed. Generally when a loan payment consists of only a principal and interest payment, the amount owed for interest is processed first and the remaining amount of the payment is...
The discounted value of a series of equal amounts occurring at future points with equal time intervals.
The relationship between two variables. There can be correlation without a cause-and-effect relationship. Also see coefficient of correlation.
A non-operating item that results from the sale of a long-term asset for more (gain) or less (loss) than its carrying amount or book value.
Preferred stock that can be exchanged by the holder for a specified number of shares of common stock of the same company.
A balance on the right side (credit side) of an account in the general ledger.
A status granted by the U.S. Internal Revenue Service (IRS) to nonprofits applying and meeting certain conditions. This status means that the nonprofit organization is not subject to federal income taxes. It also means...
A net debit balance for the total amount of owner’s equity. It is the result of the reported amount of liabilities exceeding the reported amount of assets.
The regular retained earnings. Retained earnings that have not been restricted.
Often a 1% or 2% reduction in the amount owed if an invoice is paid within 10 days of the invoice date instead of the customary 30 days.
General rules upon which more-detailed, specific accounting rules and standards are based. To learn more, see Explanation of Accounting Principles.
The stated interest rate appearing on the face of the bond. Also referred to as the nominal rate or the stated interest rate.
This current liability account reports the amount a company owes the state and federal governments as of the balance sheet date for the employer’s unemployment tax based on the governments’ rates and the...
Receivables other than Accounts Receivable. Examples include amounts due from employees and income tax refunds receivable.
An intangible asset that is reported at cost (or lower) on the balance sheet. It might consist of a name or a logo. Trademarks should be registered with the U.S. Patent and Trademark Office. Also see trade names.
Also referred to as operating expenses. These expenses are reported in the period in which they were incurred, not the period in which they were paid.
Sometimes referred to in the context of cost or expense behavior such as “variable expenses increase as volume increases.” In this context volume might be an activity such as the number of machine hours, the...
A budget that flexes with volume. Under a flexible budget the budgeted amount of manufacturing overhead will increase if the company produces more units than planned. The flexible budget will decrease if the company...
Featured Review
"I took an accounting course 30+ years ago but never really used it in my job(s). My job recently expanded into bookkeeping and I want to hone my skills; AccountingCoach is perfect for this - it allows me to move at my own pace, and I love the test quizzes and crossword puzzles - I can really see how I am retaining the information. The price of the course is well worth it!" - Debbie M.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: