The difference in total revenues between alternative actions or plans.
The difference in total revenues between alternative actions or plans.
The situation where a company has assigned less manufacturing overhead than the amount actually incurred.
A method used by retailers for estimating the cost of ending inventory without tracking the individual units of product.
A financial ratio that expresses the income statement effect from employing an asset as a percentage of the asset’s cost on the balance sheet.
A trademark associated with a service rather than a product.
Verifiable, objective (not subjective), and you can depend on it.
A liability account used to record an amount received from a customer before a service has been provided or before goods have been shipped. This account is referred to as a deferred revenue account and could be entitled...
A publication by the U.S. Internal Revenue Service (IRS) to assist employers with federal payroll taxes. The complete title of the publication is Publication 15 (Circular E), Employer’s Tax Guide. It is available...
What are byproducts? Byproducts, or by-products, are products with relatively little value that emerge from a common process along with the main products. The main products have significant value and are referred to as...
A cash dividend that has been declared by the board of directors, but not yet paid.
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.
See sole proprietorship.
A variance arising in a standard costing system that indicates the difference between the standard amount of variable manufacturing overhead for the good units produced (standard hours times standard rate) and the...
Life insurance with a cash value (as opposed to term insurance, which does not have a cash value).
A highly summarized income statement
The cost accounting system where costs are recorded by individual job (versus process costing system). The job order system can use standard costs or actual costs.
In accounting, cost is defined as the cash amount (or the cash equivalent) given up for an asset. Cost includes all costs necessary to get an asset in place and ready for use. For example, the cost of an item in...
See uncleared check.
See incremental cost.
A certified public accountant (CPA) who practices accounting in his or her own firm without another CPA as a partner or shareholder.
Also referred to as manufacturing overhead, factory burden, factory overhead, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
The owner’s equity account that contains the amount invested in the sole proprietorship by Matt Jones plus the net income since the company began minus the draws made by Matt Jones since the company began. The...
A lien on real estate to protect a lender. The loan made with such security is referred to as a mortgage loan.
Savings accounts and certificates of deposits at a bank.
A current liability account that reports the amounts owed to employees for hours worked but not yet paid as of the date of the balance sheet.
The statement of comprehensive income covers the same period of time as the income statement, and consists of two major sections: Net income (taken from the income statement) Other comprehensive income (adjustments...
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.
See activity-based costing.
See accrued payroll.
A check drawn on a bank. A cashier’s check leaves no doubt that the funds represented by the check are real. A bank money order or a certified check would also assure the payee that the funds are in the bank.
Comprehensive income consists of the following two components (which are reported on the statement of comprehensive income): Net income (or loss) from the income statement, and Other comprehensive income (some...
Also referred to as peripheral activities. A company’s activities outside of its main activities of buying/producing and selling. Examples include a retailer’s financing function involving interest revenue...
A corporation with a limited number of stockholders and whose stock is usually not publicly traded.
See paid-in capital in excess of par value – preferred stock.
The first-in, first-out cost flow assumumption under the perpetual inventory system. The first (oldest) costs are the first costs removed from inventory at the time that goods are sold. The most recent costs will remain...
The combination of direct materials and direct labor.
A bond (long-term debt) that is secured by a lien on real estate.
For example.
Receivables due from customers. See accounts receivable.
See just-in-time (JIT).
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