A common cost. Often refers to the costs prior to the point where several products emerge from a common process.
A common cost. Often refers to the costs prior to the point where several products emerge from a common process.
The process of becoming outdated or no longer being economically feasible (often caused by technology advances). For example, personal computers and computer chips from 2010 are obsolete even though they can be operated....
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.
General rules upon which more-detailed, specific accounting rules and standards are based. To learn more, see Explanation of Accounting Principles.
See economic order quantity (EOQ) model.
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...
A technique for estimating the number of years or the interest rate necessary to double your money. Divide 72 by the interest rate and you will have the approximate number of years needed to double your money. If your...
Comparable amounts from several years are expressed as a percentage of the amount during a base year. For example, sales from each year of 2014 through 2023 are presented as a percentage of the sales during 2014.
Net income divided by net sales.
The ratio of total liabilities to total assets. For example, a company with total assets of $800,000 and total liabilities of $200,000 will have a debt ratio of 0.25 to 1, or 25% ($200,000 divided by $800,000).
For a manufacturer these would include factory supplies and other materials considered to be manufacturing overhead.
See cost-volume-profit (CVP).
The multiplication of a quantity times its cost. For example, if 100 items are in inventory at a cost of $3.46 each, the inventory extension is $346.
A check bearing a date in the future. The company receiving such a check should not report the check as cash until the date of the check.
Net sales revenues minus the cost of goods sold.
Payables arising from the purchase of merchandise inventory and outside services. See accounts payable.
An item that is dependent on another item. For example, your wages would be a dependent variable and the hours you work would be the independent variable. This relationship is often expressed as y = a + bx, where y is...
Present value.
The formal planning for significant expenditures, such as property, plant and equipment.
See nonprofit organization.
See deferred expense.
The situation where the number of units sold is not influenced by a change in selling price. In other words, a price increase does not have a corresponding decrease in the number of units sold.
A donor-imposed restriction on net assets that requires using the assets within a specified passage of time.
Free on Board. See FOB destination and FOB shipping point.
To assign or allocate on a logical basis. For example, the materials price variance in a standard costing system is prorated to the following categories: materials inventory, work-in-process inventory, finished goods...
The Roman numerals that indicate 1,000,000.
Officers of a corporation are appointed by the board of directors to execute the policies that have been established by the board of directors. The officers include the chief executive officer (CEO), the chief operations...
The cost of telephone service that was used during the period shown on the income statement.
See first-in, still here (FISH).
A structured market for trading stocks and bonds such as the New York Stock Exchange or NASDAQ. Capital market can also include less structured markets such as private placements.
A bond (long-term debt) that is secured by a lien on real estate.
A decrease in the value of a long term asset to an amount that is less than the amount shown under the cost principle.
See Internal Revenue Service (IRS).
See accrued payroll.
Classifying expenses according to the type of work such as selling, administration, general, and financing.
The Roman numeral that represents 1000. Other symbols that are sometimes used to represent 1000 include k and m. (Note: Sometimes M is also used to indicate million.)
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.
See International Financial Reporting Standards (IFRS).
The acronym for cost of sales or for the cost of services.
An amount that should be charged to the current accounting period as an expense.
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