A contra liability account containing the amount of discount on bonds payable that has not yet been amortized to interest expense. To learn more, see Explanation of Bonds Payable.
A contra liability account containing the amount of discount on bonds payable that has not yet been amortized to interest expense. To learn more, see Explanation of Bonds Payable.
See cost of goods sold.
Merchandise that is not owned by the party in possession of the goods. For example, a craftsperson might have produced 100 ornate wood items. In order to sell the items, the person asks a local merchant to take five of...
See donor-imposed restriction.
The first major section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
The mathematical result of sales revenues divided by average total assets during the period of the sales.
The United States Internal Revenue Code which contains the federal laws and regulations pertaining to federal taxes.
The depreciation computed for financial reporting purposes—as opposed to income tax depreciation. To learn more, see Explanation of Depreciation.
Usually a plastic card that is used in place of writing a check. The amount of the transaction is immediately deducted from the user’s checking account.
If a mortgage payment is due on January 1, should the payment be accrued at December 31? The following answer assumes that the accrual basis of accounting (also known as the accrual method of accounting) is being used…...
The supplier of goods or services.
A second retained earnings account that reports the amount that a company has transferred from the unappropriated or regular retained earnings account.
See deferred expense.
See job order cost sheet.
A decrease in the value of a long term asset to an amount that is less than the amount shown under the cost principle.
Often referred to as fixed assets. This would include long term assets such as buildings and equipment used by a company. Plant assets (other than land) will be depreciated over their useful lives.
See International Financial Reporting Standards (IFRS).
See sum-of-the-years’ digits method of depreciation.
Bookkeeping Video Training Part 7 Adjusting entries: deferred revenues, accrued revenues, reversing accruals to avoid double-counting Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform...
A person who is considered to be both the employer and the employee. For example, the sole owner of a sole proprietorship is self-employed.
A term used with standard costs to report a difference between actual costs and standard costs. To learn more, see Explanation of Standard Costing.
The indirect manufacturing costs actually incurred during an accounting period.
A contract to provide coverage or protection in exchange for a payment or “premium.” Examples of insurance protection include liability, property, business interruption, life, disability, etc. The company...
Another word for purchasing.
A projection or estimate of the future quantities and selling prices of products and/or services.
This current liability account reports the amount of interest the company owes as of the date of the balance sheet. (Future interest is not recorded as a liability.)
The total annual return on a bond investment if held to maturity. For example, if a bond is purchased at less than its maturity value, the yield to maturity includes the annual interest plus the gain as the bond...
Current assets minus current liabilities. Also see working capital.
The temporary contra purchases account used in a periodic inventory system which represents the discounts allowed by paying within prescribed credit terms such as 1/10 (1% can be deducted from the amount owed if paid...
See FASB Interpretation.
Financial statements (such as the income statement and balance sheet) that summarize much of the detail into a few major lines of information.
What is the accounts receivable turnover ratio? Definition of Accounts Receivable Turnover Ratio The accounts receivable turnover ratio (or receivables turnover ratio) is an important financial ratio that indicates a...
A top ranking corporation official usually reporting to the chief executive officer and responsible for the operations of the corporation.
The symbol that represents the total cost in the equation of the cost line y = a + bx.
Gross wages or gross salaries minus withholdings for payroll taxes and other items such as insurance, union dues, United Way, etc. Also referred to as “take home pay” or the amount the employee...
A statement that shows the changes in retained earnings from one point to another.
Cash received. Receipts are different from revenues.
See Explanation of Financial Ratios.
Checks which have been written, but have not yet cleared the bank on which they were drawn. In the bank reconciliation, outstanding checks are deducted from the balance per bank. To learn more, see Explanation of Bank...
Usually refers to a statement from the bank showing the activity in a company’s checking account. The statement includes the deposits received by the bank, checks paid by the bank, bank service charge, and other...
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