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 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).
An owner’s or stockholders’ equity account with a debit balance instead of the normal credit balance. Examples include the owner’s drawing account, a dividend account, and the treasury stock account.
The gross purchases of merchandise for resale minus purchase returns, purchase allowances, and purchase discounts.
This term is used in place of retained earnings when the balance in the retained earnings account is negative (a debit balance).
Usually this refers to manufacturing employees who are not classified as direct labor. Material handlers, mechanics, setup workers, clean up workers are a few examples of indirect labor.
A directive to a company’s bank to not honor (pay) a specific check that the company had written. The company making the request will be charged a fee by the bank for this service.
A trademark associated with a service rather than a product.
A statistical tool that uses the least-squares method to estimate the fixed and variable components of mixed costs.
This is an administrative expense which reports the fees incurred by a company for the expenses associated with its checking account transactions.
Usually a person without a four-year or five-year accounting degree employed to record routine financial transactions for smaller companies.
An indicator of profitability that is measured by dividing the accounting net income by the amount invested.
A requirement that the receiving nonprofit organization must return an asset to the donor in the event that some future and uncertain event does or does not occur.
A written opinion of an independent certified public accountant that a company’s financial statements are a fair representation of the company’s financial performance and financial position. The...
The net amount of gross sales on credit minus the sales returns, sales allowances, and sales discounts which pertain to the sales on credit.
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A part of a manufacturer’s inventory that includes direct and indirect materials. Also see inventory: materials.
The internal growth of a company’s existing businesses. Organic growth excludes the additional sales resulting from acquiring another company.
The generally accepted accounting principles practiced in the United States.
A table showing the present value factors to be applied to the recurring equal amount occurring at the end of each equal time interval.
Checks received from customers and others that are not yet deposited into a bank account. Undeposited checks which are not postdated are reported as part of a company’s cash.
Merchandise that was returned to the seller by a customer. This account is a contra sales account. When merchandise sold on credit is returned, this account is debited and Accounts Receivable is credited.
The general ledger account Cash that reports currency, coins, undeposited checks, and the checking accounts of a company. (Could also be a reference to a customer required to pay cash for purchases.)
A liability account that reports the amount of taxes that a company owes as of the balance sheet date.
Support that has been either temporarily or permanently restricted by the donor.
A legal entity organized under state laws that is considered separate from its owners. Ownership is evidenced by shares of stock.
A mathematical technique that determines the best-fitting line through a series of points. This is used in regression analysis.
Direct materials, direct labor and manufacturing overhead costs. Also referred to as product costs, production costs, and inventoriable costs.
This is a national organization of certified public accountants. For more information go to www.aicpa.org.
This is the sum of the beginning inventory of merchandise plus the net cost of the merchandise purchased including freight-in.
In manufacturing, the product cost includes direct materials, direct labor, and manufacturing overhead. A retailer’s product cost is the net cost from suppliers plus costs to get the product in place and ready for...
To learn more, see our Financial Ratios Outline.
The party owning an asset and receiving rent from another party (the lessee).
Bookkeeping Video Training Part 3 Accounts for expenses are debited, the income statement and balance sheet are connected, accrual method of accounting Must-Watch Video Learn How to Advance Your Accounting and...
A revenue, expense, gain, or loss account. To learn more, see Explanation of Income Statement.
The depreciation used on a company’s income tax return. Usually this is different from the depreciation used on the financial statements.
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...
Financial Statements Video Training Part 14 Statement of cash flows: free cash flow; statement of owner's equity Must-Watch Video Learn How to Advance Your Accounting and Bookkeeping Career Perform better at your...
Reports too little. If an error understates the inventory and the company’s net income, the amount of inventory and the amount of net income being reported are less than the correct amounts.
A method used by retailers for estimating the cost of ending inventory without tracking the individual units of product.
A table showing present value factors for various interest rates and numbers of years/periods for a single amount at a future point in time.
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