The expense incurred during the time interval indicated on the income statement for using rented equipment.
The expense incurred during the time interval indicated on the income statement for using rented equipment.
Selling price per unit minus variable costs per unit, or revenues per unit minus expenses per unit.
A decision whether to make some products or equipment in-house versus purchasing the products or equipment from another company. As in any decision, one must compare the relevant costs and other opportunities. It is...
The amount that a recurring equal amount deposited at the end of each period will grow to under compounded interest. An ordinary annuity is also known as an annuity in arrears.
The first section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
A statistical tool used to determine the coefficients of the two or more independent variables involved in estimating the amount of the dependent variable. It utilizes the least-squares method for determining the...
Factors that are used to convert future cash flows to their present value.
In the context of inventory this means that the inventory should be reported at the lower of its cost or its net realizable value (NRV). The rule is associated with the conservatism guideline or principle. Net realizable...
Retained earnings not available for dividends.
The expensing of an intangible asset from the balance sheet to the income statement.
A method used in allocating the costs of manufacturing service departments (factory administration, maintenance, etc.) directly to the producing departments in the factory. Under this method, no service department cost...
A journal entry that adjusts an amount already recorded on the books of a company because part of the amount pertains to a future accounting period. To learn more, see Explanation of Adjusting Entries.
See bond issue costs.
The second major section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
The description of the required reporting of expenses by some nonprofits. The expenses will be presented on lines based on the nature of the expense (salaries, fringe benefits, rent, utilities, postage, professional...
The amount of rent that has been incurred by a tenant during an accounting period shown in the heading of the income statement, but it has not been paid as of the last day of the accounting period.
Dollars of gross profit divided by the dollars of net sales. Also known as gross margin.
See direct labor efficiency variance.
See direct materials usage variance.
The actual cost incurred for manufacturing costs other than direct materials and direct labor which increase as production volume increases. Examples include manufacturing supplies and electricity to operate the...
A lease where the lessee/tenant pays not only rent, but also the property taxes, insurance, and maintenance.
See direct labor rate variance.
For a merchandiser this is the cost of merchandise purchased after deducting purchase returns, purchase allowances, and purchase discounts but after adding freight-in.
See current portion of long-term debt.
A term often used when referring to production workers and other workers who are paid with an hourly pay rate. These workers’ compensation is referred to as “wages” (as opposed to salaries).
A phrase that indicates a transaction was between two independent parties and that the resulting amount is a fair representation of the value.
An allocation of indirect costs based on the units of production, the number of machine hours, the number of labor hours, etc.
The depreciation method based on the number of units produced by the asset rather than on the passage of time. This method is also referred to as the units of activity method because depreciation is based on some...
See net realizable value.
A government index that tracks the changes in prices in order to measure general inflation. This index can be used by small companies to obtain the benefits of LIFO without tracking individual units in inventory. See the...
See direct labor efficiency variance.
The first major section of the statement of cash flows. To learn more, see Explanation of Cash Flow Statement.
See direct labor rate variance.
A variance arising in a standard costing system that indicates the difference between the actual amount of fixed manufacturing overhead incurred and the budgeted amount of fixed manufacturing overhead. To learn more, see...
See present value of an annuity due table, present value of an ordinary annuity table, and present value of 1 table.
See inventory: work-in-process (WIP).
The percentage resulting from dividing dividends per share by earnings per share.
Variable costs and expenses divided by net sales. To learn more, see Explanation of Break-even Point.
Noncurrent assets. Assets that are not intended to be turned into cash or be consumed within one year of the balance sheet date. Long-term assets include long-term investments, property, plant, equipment, intangible...
In the context of inventory, net realizable value or NRV is the expected selling price in the ordinary course of business minus the costs of completion, disposal, and transportation. In the context of accounts receivable...
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