An effort to have materials delivered by suppliers just as the materials are needed, thereby eliminating the need for the buyer to store inventories of component parts. Obviously, the buyer is relying on the...
An effort to have materials delivered by suppliers just as the materials are needed, thereby eliminating the need for the buyer to store inventories of component parts. Obviously, the buyer is relying on the...
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.
Sales made on account. Sales where the customer is allowed to pay at a later date. Noncash sales.
Financial statements based upon various assumptions.
See Explanation of Inventory and Cost of Goods Sold.
See inventory: work-in-process (WIP).
Federal government securities with a fixed interest rate and maturing in 10 years or less.
The name used by a buyer of goods or services for the sales invoice or bill received from the supplier of the goods or services.
A common cost. Often refers to the costs prior to the point where several products emerge from a common process.
The expensing of an intangible asset from the balance sheet to the income statement.
Costs that have been used up or consumed. Expired costs are reported as expenses. (Costs that have not yet expired are reported as assets.)
The expenses directly incurred by a nonprofit organization in providing one of its programs.
A situation where there is correlation between the independent variables used in explaining the change in a dependent variable. When this condition exists, you cannot have confidence in the individual coefficients of the...
Manufacturing overhead assigned to units of output. Often this is applied via a standard overhead rate. See the Explanation of Standard Costing.
Also referred to as factory burden, factory overhead, indirect manufacturing costs, and manufacturing support costs. To learn more, see Explanation of Manufacturing Overhead.
The combined federal and state income tax rate that applies to an additional amount of taxable income.
A document that indicates the quantity of goods received. This report is often matched in the accounts payable department with the purchase order and the vendor’s invoice prior to paying the vendor.
A target rate. For example, companies may decide to invest only in projects that generate an internal rate of return that is in excess of 12%. The 12% figure becomes the hurdle rate.
Costs that are common to several products, processes, activities, departments, territories, etc. Often common costs are subsequently allocated to each of the joint products, joint processes, etc. in order to determine...
The leading accounting and bookkeeping software for small businesses in the United States. QuickBooks is the registered trademark of Intuit Inc.
Net sales revenues minus the cost of goods sold.
In accounting the qualitative characteristics include relevance, reliability, comparability, and consistency. Qualitative characteristics are discussed in the Financial Accounting Standards Board’s Statement of...
Sending work to another organization instead of processing the work in-house. Often payroll is outsourced to a company that specializes in payroll processing.
An employee fringe benefit provided by an employer that allows employees to be absent from work with pay. Often the number of paid vacation days allowed is based on the number of years of employment.
The systematic allocation of the cost of a natural resource from the balance sheet to the income statement.
A word to describe whether a company is able to earn more revenues than expenses.
The stated interest rate appearing on the face of the bond. Also referred to as the nominal rate or the stated interest rate.
The activities provided by a nonprofit in carrying out one of its major programs.
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.
The cost of telephone service that was used during the period shown on the income statement.
A reduction in the cost of goods purchased that is allowed by the supplier based on the authorized return of goods. Also a general ledger account in which the purchase returns are recorded under the periodic inventory...
The percentage resulting from dividing dividends per share by earnings per share.
The second major section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
A payment. The expenditure might be for a significant long term asset (capital expenditure), a short term asset (prepaid insurance), a reduction in a liability, or for an immediate expense such as rent.
A certified public accountant (CPA) who practices accounting in his or her own firm without another CPA as a partner or shareholder.
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.
In some countries turnover refers to sales. Turnover is also associated with some financial ratios such as the inventory turnover ratio, the accounts receivable turnover ratio, and asset turnover ratio.
An original record containing the details to substantiate a transaction entered in an accounting system. For example, the source document for a purchase of merchandise is the supplier’s invoice supported by the...
In activity-based costing, this refers to the number of items that will be produced after a machine has been setup.
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