What is relevant range? Definition of Relevant Range In accounting, the term relevant range usually refers to a normal range of volume or normal amount of activity in which the total amount of a company’s fixed costs...
What is relevant range? Definition of Relevant Range In accounting, the term relevant range usually refers to a normal range of volume or normal amount of activity in which the total amount of a company’s fixed costs...
compliance with U.S. accounting principles and income tax regulations. Traditionally, the predetermined manufacturing overhead rate was calculated prior to a new year by dividing the budgeted amount of manufacturing...
, assigned, or applied to goods produced. Examples of Actual Overhead A few of the many overhead costs are: Electricity used to power the production equipment Natural gas to heat the production facilities Depreciation of...
it will be reported on the monthly income statement, thereby being matched with the month’s revenues. Normal repairs to the machine are also a revenue expenditure, since the expenditure does not make the machine more...
such as the sale of goods and fees earned from providing services Nonoperating revenues (or other income), earned peripheral activities. An example is interest income that is earned by a retailer when it invests its...
, and the production volume variance are generally not related to the efficiency of the operations. On the other hand, the materials usage variance, the labor efficiency variance, and the variable manufacturing...
Debits and Credits (Flashcards) Download Single-Sided PDF Download Double-Sided PDF All Cards (30) Marked Wrong (0) Marked Right (0) debit (or) debit balance This is the left side of an account and also the normal...
The “bottom line” on the statement of activities. The change in net assets results from revenues, expenses, and the release of assets from restrictions. It is computed for an organization’s three...
A subgroup of a nonprofit’s supporting activities expenses. This functional expense classification is used for the fundraising activities including fundraising campaigns, mailings for funds from supporters, and...
What is a budget? A budget is a financial plan for future activities. The budgets used in business often include a sales or revenues budget detailed by products or services, production budgets, budgets for each...
. The second subtotal is the amount of operating income. Example of a Multiple-Step Income Statement Here is an example of a condensed multiple-step income statement for a hypothetical sole proprietorship: Notice these...
that shows the adjustments to most of a company's working capital accounts is the cash flows from __________ activities. Financing Wrong. Investing Wrong. Operating Right! 23. Does an amount in parentheses on the...
How many years is the appropriate time for depreciating leasehold improvements? Leasehold improvements should be depreciated or amortized according to the lessee’s normal depreciation policy except that the time period...
An asset account which is expected to have a credit balance (which is contrary to the normal debit balance of an asset account). The contra asset account is related to another asset account. For example, the contra asset...
of a single factor (such as machine hours) is likely to lead to misleading costs for a manufacturer’s goods. To address this deficiency, the activity based costing (ABC) method attempts to identify all of the diverse...
would be a contra owner equity account). 6. What is the normal balance for an asset account? Debit Right! Asset accounts normally have debit balances. Credit Wrong. Asset accounts normally have debit balances. 7. What...
classifications: Select... Operating, investing, and financing Operating and nonoperating Current and long-term Cash and noncash View Coaching The statement of cash flows (SCF) has three main sections for reporting its...
Our Explanation of Activity Based Costing illustrates how manufacturing overhead costs for a product will differ when costs are allocated using only the number of machine hours, as opposed to being allocated using the...
referring to the cost of producing the very next unit or operating for just one more hour, etc.) Example of Differential Cost and Incremental Cost Assume a company determined that the annual cost of operating its...
. Examples of ROI In the past, ROI was helpful for monitoring the decentralized divisions of large diverse corporations. The ROI calculation meant dividing division’s operating income by the average amount of operating...
of cash flows? Cash Provided/Used In Financing Activities Wrong. Cash Provided/Used In Investing Activities Right! Cash Provided/Used In Operating Activities Wrong. Supplemental Information Wrong. 16....
of a condensed single-step income statement for a hypothetical sole proprietorship (with our added notation of A, B, and A-B): Notice these items on the single-step income statement: There is only one subtraction:...
Our Explanation of Nonprofit Accounting includes a chart that contrasts the financial statements of a nonprofit (or not-for-profit) organization with those of a for-profit business corporation. There are many examples to...
Our Explanation of Bookkeeping provides you with a rich understanding of the recording of transactions. It then discusses the additional steps necessary for preparing accurate financial statements. This is great for...
flows pertains to __________ operating activities. Mark the Quiz as Complete Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your current job Refresh your skills to...
The income statement format where the operating and nonoperating revenues are grouped and totaled and the operating and nonoperating expenses are grouped and totaled. Then there is one subtraction of the combined...
A general ledger account which serves to summarize similar transactions. For example, all of the closing entries involving operating expenses might be posted to an operating expense clearing (or summary) account.
. A nonprofit organization’s financial reporting includes a statement of financial position, a statement of activities, a statement of functional expenses, and a statement of cash flows. Some nonprofits are required to...
Our Explanation of Accounts Payable provides insights on the bill paying process in a large company. Included are discussions of the three-way match, early payment discounts, end of period accruals, and more.
Cash and other resources that are expected to turn to cash or to be used up within one year of the balance sheet date. (If a company’s operating cycle is longer than one year, an item is a current asset if it will...
Costs that have both a fixed and variable component. For example, the cost of operating an automobile includes some fixed costs that do not change with the number of miles driven (e.g., operating license, insurance,...
What does NOI stand for? NOI is the acronym for net operating income. Net operating income is also referred to as income from operations. NOI excludes discontinued operations, extraordinary items, and nonoperating (or...
A measurement of financial performance of a company’s operating division that is not responsible for its financing and income taxes. The calculation is likely to be 1) the division’s operating income before...
of the division’s headquarters or executive’s office.) With that in mind, ROCE is calculated as follows: The division’s Operating Income (before income taxes and before interest expense) divided by the Assets...
other comprehensive income is not considered.) A corporation’s EBIT could be the same as its operating income. However, if the corporation has nonoperating revenues and/or gains and/or certain losses, the...
Our Explanation of Financial Accounting introduces some of the basic accounting concepts and how they affect the income statement, balance sheet, and other financial statements.
involving: Operating revenues Operating expenses Non-operating revenues and gains Non-operating expenses and losses Large companies may have thousands of income statement accounts in order to budget and report revenues...
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