The amount of an asset’s cost that will be depreciated. It is the cost minus the expected salvage value. For example, if equipment has a cost of $30,000 but is expected to have a salvage value of $3,000 then the...
The amount of an asset’s cost that will be depreciated. It is the cost minus the expected salvage value. For example, if equipment has a cost of $30,000 but is expected to have a salvage value of $3,000 then the...
A table showing the present value factors to be applied to the recurring equal amount occurring at the end of each equal time interval.
A journal entry to correct an erroneous amount previously entered in the general ledger.
Usually a current asset that reports the amount of rent that the landlord/owner has earned, but has not been received as of the date of the balance sheet.
A stated legal amount often appearing on preferred stock, bonds, and some common stock.
The situation where a company has assigned less manufacturing overhead than the amount actually incurred.
The amount of wages and related expenses that have been incurred by the employer (and earned by the employees) but have not yet been paid.
The depreciation method that results in the same equal amount of depreciation expense for each full year over the life of the asset. See Explanation of Depreciation for an illustration and further discussion of...
A liability account that reports the amount a company owes as of the date of the balance sheet for the company’s pension plan. Information on pensions can be found in an Intermediate Accounting textbook.
A retirement plan that specifies the amount that a retiree will receive, such as 1% of the person’s recent salary times the years of service. The employer’s obligation is to contribute enough money to meet...
An income statement account showing the amount of vacation expense earned by employees (by working) during the specified accounting period.
A liability account containing the amount of premium on bonds payable that has not yet been amortized to interest expense. To learn more, see Explanation of Bonds Payable.
The amount of owner’s equity or stockholders’ equity reported on a company’s balance sheet. This is not an indication of the company’s fair market value.
A term used to describe checks written by a company that have been received and paid by the bank on which they were drawn or written. The check number and amount will appear on the company’s checking account...
The amount received from the sale of an asset, from the issuance of bonds or stock, or from a bank loan.
A phrase that indicates a transaction was between two independent parties and that the resulting amount is a fair representation of the value.
This current liability account reports the amount a company owes the state and federal governments as of the balance sheet date for the employer’s unemployment tax based on the governments’ rates and the...
To receive money in exchange for a promise to repay the amount to the lender.
The term used by manufacturers to indicate that its manufacturing overhead applied or assigned to its output is less than the amount actually incurred.
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.
An amount that is expensed immediately. For example, routine repair costs on equipment are revenue expenditures because they are charged directly to an income statement account such as Repairs and Maintenance Expense.
A stockholders’ equity account with a credit balance. The credit balance results when a corporation sells some of its treasury stock for an amount that exceeds the corporation’s cost of the treasury stock...
A term often used in present value calculations to distinguish a one-time cash amount from an annuity (or series of equal payments).
A predetermined dollar amount that one unit of a finished product should cost during an accounting period.
A current liability account which reflects the amount of income taxes currently due to the federal, state, and local governments.
The amount of free cash flow divided by the weighted average number of common shares of stock outstanding during the year.
The result of subtracting operating expenses from gross profit. Income from operations is the amount before non-operating items (such as gains and losses on the sale of assets, interest revenue, and interest expense).
The amount that a bank commits to lend a borrower during a specified purpose.
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.
A contra liability account arising when the proceeds of a note payable is less than the face amount of the note. The debit balance in this account will be amortized to interest expense over the life of the note.
A plotting of points that represent both the volume and the associated cost. The y-axis indicates the amount of costs while the x-axis indicates the corresponding volumes.
A mathematical tool to optimize profits (contribution margin) given a limited amount of inputs and other constraints.
A contra asset account arising when the present value of a note receivable is less than the face amount of the note. The credit balance in this account will be amortized to interest revenue over the life of the note.
The amount of temporary staffing costs that were used during the time interval indicated in the heading of the income statement.
The current asset that represents the amount of interest revenue that was reported as earned, but has not yet been received.
A term that refers to a negative checking account balance. It arises when a company writes checks in excess of the amount it has on deposit in its checking account.
A special or specialized journal to record sales of merchandise to customers. In a manual system this saves a significant amount of recording time. In today’s computerized environment, sales are recorded...
The number of shares of stock that a corporation may issue. The amount is specified in the corporation’s articles of incorporation.
This current liability account reports the amount a company owes (must remit) for its employees’ Social Security and Medicare taxes as of the date of the balance sheet.
The amount by which total costs will change when an activity is increased by one unit. In the equation of the line, y = a + bx, the variable cost rate is represented by ‘b’ and the units of activity are...
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