This term is often associated with an investment in the common stock (and/or preferred stock) of a corporation when the stock is publicly traded.
This term is often associated with an investment in the common stock (and/or preferred stock) of a corporation when the stock is publicly traded.
A department within a factory that does not directly produce a product. Examples are the factory maintenance department, factory administrative department, and quality assurance department.
Part of a company’s administration that is responsible for preparing the financial statements, maintaining the general ledger, paying bills, billing customers, payroll, cost accounting, financial analysis, and...
In regression analysis this is a statistic (designated as r-squared) indicating the percentage of the change occurring in the dependent variable that is explained by the change in the independent variable(s). The percent...
A liability account on the books of a company receiving cash in advance of delivering goods or services to the customer. The entry on the books of the company at the time the money is received in advance is a debit to...
The situation where a company has assigned less manufacturing overhead than the amount actually incurred.
Using the information generated in activity-based costing to plan and control activities and processes.
Same as book value. For example, an asset’s net book value is equal to the asset’s cost minus its accumulated depreciation.
Selling price per unit minus variable costs per unit, or revenues per unit minus expenses per unit.
A process which discounts future cash flows to the present in order to reflect the time value of money. Examples of the discounted cash flow model are net present value and internal rate of return.
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 cash dividend that has been declared by the board of directors, but not yet paid.
The compensation earned by employees who are paid on an hourly basis. It is common for production workers to earn wages, since they are usually paid via an hourly rate.
See job order cost sheet.
In accounting this is the rate used to discount future cash flows in order to determine their present value.
A restricted asset for the purpose of retiring a bond.
A non-operating item resulting from the sale of this long-term asset for less than its carrying amount (or book value).
The amount that a recurring equal amount deposited at the beginning of each period will grow to under compounded interest. An annuity due is also known as an annuity in advance.
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A second retained earnings account that reports the amount that a company has transferred from the unappropriated or regular retained earnings account.
An asset having accumulated depreciation equal to its depreciable cost (cost minus estimated salvage value). The use of an asset after it is fully depreciated will mean no depreciation expense for those accounting...
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.
Usually refers to one of the accounts receivable that was deemed to be uncollectible or worthless and was removed from the general ledger account Accounts Receivable.
A past, historical cost. They are called sunk because a past cost cannot be changed and decisions involve only the present and the future.
A predetermined dollar amount that one unit of a finished product should cost during an accounting period.
A balance sheet line to report short-term liabilities that are too insignificant to be identified separately.
Financial statement and other financial information distributed to people outside of a company.
A word to describe whether a company is able to earn more revenues than expenses.
A record in the general ledger that is used to collect and store similar information. For example, a company will have a Cash account in which every transaction involving cash is recorded. A company selling merchandise...
Financial statements that bear the report of independent auditors attesting to the financial statements’ fairness and compliance with generally accepted accounting principles.
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The time between when a check is written and when the check clears the bank account on which it is drawn.
A method of payment used in place of a paper check.
Sales before deducting sales returns, sales allowances, and sales discounts.
The number of years needed to recover the cash amount invested in a project. The calculation uses cash flows rather than accounting income flows. Generally the cash flows are not discounted to reflect the time value of...
A reduction in the cost of goods purchased that is granted by a supplier without the physical return of the goods. Also a general ledger account in which the purchase allowances are recorded under the periodic inventory...
A term often used in present value calculations to distinguish a one-time cash amount from an annuity (or series of equal payments).
A financial statement that shows all of the changes to the various stockholders’ equity accounts during the same period(s) as the income statement and statement of cash flows. It includes the amounts of...
The increase in a carrying amount. Also see write-up work.
See direct materials usage variance.
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