The acronym for cost of sales or for the cost of services.
The acronym for cost of sales or for the cost of services.
to provide the goods or services to the customer or to return the money. Hence, the current liability account Customer Deposits is credited. When the company earns the deposit amount, the current liability will be...
Goods placed with another party without transferring ownership. See consigned goods.
Payables arising from the purchase of merchandise inventory and outside services. See accounts payable.
account Accrued Expenses (or Accounts Payable). (On June 13, the company will credit Cash and will debit the liability account.) Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance...
premium. The balance in the account Prepaid Insurance will be the amount that is still prepaid as of the date of the balance sheet. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to...
The remainder or difference. In depreciation the residual value is the estimated scrap or salvage value at the end of the asset’s useful life. In the accounting equation, owner’s equity is considered to be...
No insurance. If a company chooses to self insure for fire damage, it does not have insurance for fire damage. Companies with a chain of stores in various cities may decide not to have insurance, since their risk is...
See return on capital employed.
. Definition of Expenditure An expenditure is a payment or disbursement. The expenditure may be for the purchase of an asset, a reduction of a liability, a distribution to the owners, or it could be payment in the same...
See equivalent units of production.
See compound interest.
A gross amount minus the income tax associated with the gross amount. For example, a company may dispose of one of its business segments and show a gain (proceeds exceed carrying amount) of $10,000,000. However, if the...
a promissory note. This results in the company replacing its account payable with a note payable, and the supplier replacing its account receivable with a note receivable. Join PRO to Track Progress Mark the Question as...
A statistical tool that uses the least-squares method to estimate the fixed and variable components of mixed costs.
Buildings is a noncurrent or long-term asset account which shows the cost of a building (excluding the cost of the land). Buildings will be depreciated over their useful lives by debiting the income statement account...
A bank account balance that a corporation agrees to maintain with a current or potential lender. For example, a corporation may agree to keep $1 million in its checking account at a bank in exchange for the bank agreeing...
A heading that includes common stock and preferred stock.
Sometimes used as a heading in place of paid-in capital.
The combination of direct materials and direct labor.
Verifiable, objective (not subjective), and you can depend on it.
See activity-based costing.
of the accumulated depreciation that pertains to these assets. Join PRO to Track Progress Mark the Question as Read Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your...
The bottom line of the income statement when revenues and gains are less than the aggregate amount of cost of goods sold, operating expenses, losses, and income taxes (if the company is a regular corporation).
The person or organization to whom a check is written.
In standard costing the difference between the actual cost and the standard cost of direct materials or direct labor. The price variance of direct labor is usually referred to as the labor rate variance.
See cost of goods sold.
See long-term assets.
An Italian monk associated with debits, credits, and double-entry accounting approximately 500 years ago.
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
In business decision-making, payback means the number of years before the cash invested in a project is returned. It involves the cash flows from the project but generally the cash flows are not discounted to reflect the...
A document that discloses various conditions and terms of the company’s bonds. It would include the call price, collateral, ramifications if interest is not paid, etc.
Why are some expenses deferred? Definition of Deferred Expenses Under the accrual basis of accounting, an expense is a cost that is used up, has expired, or is directly related to revenues reported on a company’s...
The cost associated with setting up a piece of production equipment. This would include the cost of the setup mechanic, the cost of scheduling, record keeping, moving the starting material, and testing the first few...
An actual count of the goods owned by the business.
A person or business that has a checking account or savings account at a bank.
A department that is directly involved in manufacturing products. Examples are the machining, finishing, and assembling departments.
See Explanation of Financial Ratios.
What is straight line depreciation? Definition of Straight-Line Depreciation Straight-line depreciation is the most common method of allocating the cost of a plant asset to expense in the accounting periods during which...
they will be paid. As a result, a loan that is due in 11 months might be listed first even though other obligations will be due within one month. Join PRO to Track Progress Mark the Question as Read Must-Watch Video...
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