The activities provided by a nonprofit in carrying out one of its major programs.
The activities provided by a nonprofit in carrying out one of its major programs.
One component of the FICA tax (the other component is Social Security). This payroll tax is withheld from employees’ payroll checks and is also matched by the employer. The employee and the employer each pay the...
See straight-line method of depreciation.
A phrase used in reconciling the bank statement. It refers to the ending balance shown on the bank statement.
Management information system.
Financial statements (such as the income statement and balance sheet) that summarize much of the detail into a few major lines of information.
The stated legal amount appearing on bonds.
A multicolumn listing of each payment required during the period of a loan. Each payment is detailed by the amount of interest, the principal payment, and the remaining unpaid principal balance. The interest portion of...
A cost associated with a batch of items, but not directly traceable to an individual item within the batch. For example, the cost to set up a machine to run a batch of 5,000 items is a batch-level cost. This cost must...
The symbol that represents the total cost in the equation of the cost line y = a + bx.
See the Explanation of Break-even Point.
How do drawings affect the financial statements? Definition of Drawings Drawings are the withdrawals of a sole proprietorship’s business assets by the owner for the owner’s personal use. The drawings or draws by the...
Usually refers to one of the accounts receivable that was deemed to be uncollectible or worthless and was removed from the general ledger account Accounts Receivable.
A quality of accounting information that facilitates comparing a company’s reporting of one accounting period to another. For example, the reader of a company’s financial statements can assume that the...
An additional quantity of items held in inventory in order to minimize the chance of an item being out of stock.
This current liability account reports the amount a company owes the United Way organization as of the balance sheet date. The amount includes the withholdings from employees’ pay plus the amount owed by the...
A method used by retailers for estimating the cost of ending inventory without tracking the individual units of product.
Point of sale.
The balance of the owner’s capital account excluding the current year’s net income and current year’s draws by the owner.
Preferred stock that can be exchanged by the holder for a specified number of shares of common stock of the same company.
What is a voided check? A voided check is a check written or partially written but then canceled or deleted by the maker of the check. The notation of “void” is used because checks are prenumbered for control...
A tax imposed on income earned by a nonprofit that is unrelated to its exempt purpose.
The preparation of financial statements from a client’s information and without any review or audit of the amounts.
See Explanation of Accounting Equation.
The formal planning for significant expenditures, such as property, plant and equipment.
See job order costing.
See petty cash replenishment.
Allowing a person or company to purchase goods or services without paying cash at the time of purchase.
An action by a nonprofit organization’s board of directors to earmark an asset for a specified purpose. Since this is not a donor-imposed restriction, the designated asset is classified and reported as part of...
A liability account with a debit balance. Discount on Bonds Payable is a contra account associated with the liability account Bonds Payable.
See not sufficient funds (NSF) check.
What is a dividend? Definition of Dividend Generally, the term dividend refers to a cash dividend, which is distribution of a portion of a corporation’s earnings to its stockholders in the form of cash. The cash...
See uncleared check.
What is a classified balance sheet? Definition of Classified Balance Sheet A classified balance sheet arranges the amounts from a company’s balance sheet accounts into a format that is useful for the readers. For...
A special journal (or specialized journal) used to record money received. In a manual system this will allow one entry to the Cash account for the month (or shorter periods) instead of debiting the Cash account for every...
See accounts payable.
A person or organization that gives or donates money, property, services, etc.
This contra owner’s equity account has a debit balance that represents the current year draws made by the sole proprietor, R. Smith. After the year’s financial statements have been prepared, the balance in...
An employee’s pretax compensation that is based on annual or monthly amounts rather than an hourly rate. Management employees are usually paid salaries. To learn more, see Explanation of Payroll Accounting.
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