A company’s sales in a market as compared to the total sales in that market. For example, General Motors share of the U.S. market has decreased from more than 50% in the 1960’s to its present market share of...
A company’s sales in a market as compared to the total sales in that market. For example, General Motors share of the U.S. market has decreased from more than 50% in the 1960’s to its present market share of...
premium that is paid in advance for insurance coverage on a company’s vehicles. The amount paid is often recorded in the current asset account Prepaid Insurance. If the company issues monthly financial statements, its...
The party owning an asset and receiving rent from another party (the lessee).
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.)
Someone who performs a task for a company, but is not an employee. The IRS has criteria to assist in distinguishing between an independent contractor and an employee.
Net sales is the gross amount of Sales minus Sales Returns and Allowances, and Sales Discounts for the time interval indicated on the income statement.
In standard costing the difference between the actual cost and the standard cost of direct materials or direct labor. The price variance of direct labor is usually referred to as the labor rate variance.
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.
Net sales revenues minus the cost of goods sold.
See Financial Accounting Foundation.
A balance on the left side of an account in the general ledger. Typically expenses, losses, and assets have debit balances.
The amount of a long-term asset’s cost that has been allocated to Depreciation Expense since the time that the asset was acquired. Accumulated Depreciation is a long-term contra asset account (an asset account with...
An additional quantity of items held in inventory in order to minimize the chance of an item being out of stock.
See return on investment (ROI).
Life insurance without a cash value.
See notes to financial statements.
See outstanding checks.
A form used at a bank to inform its customer that the customer’s account is being reduced for a fee or other charge.
Corporations whose stock is traded on stock exchanges. Also referred to as publicly-traded corporations.
A projection or estimate of the future quantities and selling prices of products and/or services.
The indirect manufacturing costs actually incurred during an accounting period.
Sending merchandise to another party (an agent, consignee) in order to sell the merchandise. Also see consigned goods.
A contract to provide coverage or protection in exchange for a payment or “premium.” Examples of insurance protection include liability, property, business interruption, life, disability, etc. The company...
The combination of a manufacturer’s direct labor and factory overhead.
The direct method could refer to the method of preparing the statement of cash flows. The direct method could also refer to the method of allocating a manufacturing facility’s service departments to its production...
A long term asset account containing the cost of delivery equipment acquired by a company and used in its business. The account will appear on the balance sheet under the heading of Property, Plant and Equipment. There...
The revenue from the next unit.
A lender such as a bank who has placed a lien on a borrower’s assets. As a result, the lender has collateral until the loan amount is repaid.
Commitments are items that are not reported as liabilities as of the balance sheet date. Some of these items are reported in the notes to the financial statements. Examples include noncancelable contracts to rent space...
This accounting guideline states that if doubt exists between two acceptable alternatives (in other words the accountant needs to break a tie), the accountant should choose the alternative that will result in a lesser...
The person paying rent for using but not owning the asset.
A graph’s vertical scale that usually indicates the total dollars for the volume or units indicated by the x-axis.
A dollar adjusted for inflation. If an asset such as land was purchased for $10,000 many years ago when the consumer price index (CPI) was 100 and today the CPI is 400, today’s constant-dollar amount would be...
Does the income statement explain the change in the equity section of a balance sheet? The income statement could explain the change in the equity section of a balance sheet. However, there are likely to be some other...
A person or business that has a checking account or savings account at a bank.
Goods sold by a retailer, wholesaler, distributor, manufacturer, etc.
See cash surrender value.
The best fitting line through a series of points as determined by the least-squares method.
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