The amount appearing in the general ledger. When reconciling the bank statement, the balance per books is the balance of the Cash account in the general ledger that pertains to the bank account.
The amount appearing in the general ledger. When reconciling the bank statement, the balance per books is the balance of the Cash account in the general ledger that pertains to the bank account.
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...
Also referred to as factory burden, factory overhead, indirect manufacturing costs, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
A temporary account to which the income statement accounts are closed. This account is then closed to the owner’s capital account or a corporation’s retained earnings account. This and other summary accounts...
Someone who performs a task for a company, but is not an employee. The IRS has criteria to assist in distinguishing between an independent contractor and an employee.
A revenue, expense, gain, or loss account. To learn more, see Explanation of Income Statement.
The direct method could refer to the method of preparing the statement of cash flows. The direct method could also refer to the method of allocating a manufacturing facility’s service departments to its production...
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.
A mathematical tool to optimize profits (contribution margin) given a limited amount of inputs and other constraints.
This financial statistic is the net income of a corporation after income tax (less any preferred dividends) divided by the weighted average number of shares of common stock outstanding during the same period of time.
The symbol for the number of units of product, number of machine hours, or other indicator of activity or volume as shown in the equation of the cost line y = a + bx.
An example is the major overhaul of a truck’s engine that will extend the useful life of the truck. This expenditure is recorded on the balance sheet in an asset (or in a contra asset) account and then depreciated...
One of the financial statements issued by a nonprofit organization which reports expenses according to both function and nature. Learn more about Nonprofit Accounting.
A quality of accounting information that facilitates the comparison of financial reporting of one company to the financial reporting of another company.
The actual cost of direct materials, the actual cost of direct labor, and manufacturing overhead applied by using a predetermined annual overhead rate.
A symbol that indicates the variable cost rate and also the slope of a straight line. For example, in the equation of the straight line, y = a + bx, ‘b’ represents the variable cost rate per unit of...
Financial Statements Video Training Part 2 Balance sheet: accounts receivable, estimated allowance for doubtful accounts, inventory cost flows (FIFO & LIFO) Must-Watch Video Learn How to Advance Your Accounting and...
Often a liability representing the differences between the income tax expense associated with the revenues and expenses reported on a corporation’s income statements and the actual income tax appearing on the...
See income statement. To learn more, see Explanation of Income Statement.
The bank account on which checks are written or drawn. A bank refers to checking accounts as demand deposits.
The person that owes money. If a bank lent you money, the bank is the creditor and you are the debtor.
The relationship between two variables. There can be correlation without a cause-and-effect relationship. Also see coefficient of correlation.
A bond that is callable by the issuer at a certain price. The price and other conditions are disclosed in the bond’s indenture.
A company might construct a building and then sell the building to an investor who in turn leases the building back to the company.
The stockholders’ equity account which reports the par value of the preferred shares of stock that have been issued. Amounts received that are greater than the par value are recorded in Paid-in Capital in Excess of...
One of two broad functional categories for sorting and reporting a nonprofit organization’s expenses. (The other is program expenses.) Supporting services expenses consists of 1) management and general expenses,...
Assets associated with depreciation. Examples include buildings, equipment, furniture, fixtures, trucks, automobiles, etc.
The amount in a bank account according to the bank’s records.
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 number of shares of stock that a corporation may issue. The amount is specified in the corporation’s articles of incorporation.
The journal entry recorded in the general journal (as opposed to the sales journal, cash journal, etc.).
The accounting focused on determining the cost per unit of a manufacturer in order to value inventory and cost of goods sold. It is also used to determine unit costs of items processed in service businesses, such as a...
One of the amounts used in determining the amount of interest to be capitalized when a company self-constructs certain long-term assets.
Current assets minus current liabilities. Also see working capital.
An employee’s pretax compensation based on hours worked times an hourly rate of pay. Production workers and nonmanagement employees are usually paid wages. To learn more, see Explanation of Payroll Accounting.
See direct materials usage variance.
A loss from holding an asset and the loss has not yet been reported in the financial statements.
An income statement that has more than one subtraction in arriving at net income. An income statement showing gross profit is an indication it is a multiple-step income statement.
The balance sheet classification that is reported immediately after current assets and before property, plant, and equipment.
Featured Review
"I have a small bookkeeping company. Being a PRO user on AccountingCoach has been transformative for my bookkeeping and accounting skills. The comprehensive lessons and interactive quizzes provide a structured learning experience, demystifying complex accounting concepts. The clear explanations, coupled with real-world examples, have significantly improved my proficiency in my business. The platform's intuitive interface enhances accessibility, allowing me to seamlessly navigate through various topics. The PRO features, including in-depth Q&A sessions and additional resources, ensure I stay ahead in my financial endeavors. AccountingCoach is an indispensable tool for anyone seeking a profound grasp of accounting principles, and its PRO membership is worth every penny for the enriched learning journey." - Jonathon P.
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: