An actual count of the goods owned by the business.
An actual count of the goods owned by the business.
A loan from a bank or other lender in which the borrower has pledged an asset as collateral in case the loan cannot be repaid in full.
What is the difference between wages and salary? You should be aware that some people use the terms wages and salary interchangeably. I and many others make the following distinction… Definition of Wages Wages are...
See certified public accountant.
In accounting, cost is defined as the cash amount (or the cash equivalent) given up for an asset. Cost includes all costs necessary to get an asset in place and ready for use. For example, the cost of an item in...
The term used in place of retained earnings when a corporation has a negative (debit) balance in its account Retained Earnings.
What is a common carrier? A common carrier is a business that transports goods for other companies, organizations, or individuals. The common carrier is responsible for any loss associated with the transport of the...
An amount that is expensed immediately. For example, routine repair costs on equipment are revenue expenditures because they are charged directly to an income statement account such as Repairs and Maintenance Expense.
The accounting or bookkeeping system that does not utilize computer software for entering transactions into journals and ledgers.
The result after subtracting the income tax associated with a given amount. For example, if a corporation has a gain of $100,000 before tax, and its income tax rate is 30%, its after-tax gain is $70,000. If a corporation...
The activities involved in earning revenues. For example, the purchase or manufacturing of merchandise and the sale of the merchandise including marketing and administration. In the statement of cash flows the operating...
Financial Executives Institute.
The withdrawal of business cash or other assets by the owner for the personal use of the owner. Withdrawals of cash by the owner are recorded with a debit to the owner’s drawing account and a credit to the cash...
A person or organization that gives or donates money, property, services, etc.
A gain that occurs by holding an asset. For example, if a company bought land for $20,000 many years ago and today the company continues to hold the land and its value is now $175,000, the company has a holding gain of...
on the company’s balance sheet is accurate. The additions and deductions on the bank statement are compared (or reconciled) with the items that are entered in the company’s general ledger Cash account. Some...
See external financial reporting.
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...
Usually the difference between the cost of inventory at LIFO versus the cost of inventory at FIFO.
The expenses directly incurred by a nonprofit organization in providing one of its programs.
See credit memo.
The abbreviation for the accounting and bookkeeping term debit.
A company might construct a building and then sell the building to an investor who in turn leases the building back to the company.
See chief executive officer.
The internal growth of a company’s existing businesses. Organic growth excludes the additional sales resulting from acquiring another company.
Sales before deducting sales returns, sales allowances, and sales discounts.
The borrower who provides to a lender an asset as collateral for a loan.
Includes the main financial statements (income statement, balance sheet, statement of cash flows, statement of retained earnings, statement of stockholders’ equity) plus other financial information such as annual...
See FASB Interpretation.
Management information system.
To eliminate debt such as a company’s repurchase or retirement of its outstanding bonds.
A part of a manufacturer’s inventory that includes direct and indirect materials. Also see inventory: materials.
Bonds with one maturity date (as opposed to serial bond).
The benefit foregone by choosing another course of action. Also known as the opportunity cost. The lost opportunity is sometimes measured by the lost contribution margin (sales minus the related variable costs).
A gross amount minus the income tax associated with the gross amount. For example, a company may dispose of one of its business segments and show a gain (proceeds exceed carrying amount) of $10,000,000. However, if the...
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...
Net sales revenues minus the cost of goods sold.
The person or organization to whom a check is written.
See accrued payroll.
Past omitted dividends on cumulative preferred stock. Generally these omitted dividends were not declared and, therefore, do not appear on the corporation’s balance sheet as a liability. However, they must be...
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