The price at which one division or subsidiary of a company transfers products to another division or subsidiary of the company.
The price at which one division or subsidiary of a company transfers products to another division or subsidiary of the company.
The statistic known as the coefficient of correlation. The range of this statistic is -1 to +1. When this statistic is squared the result is the percentage change in the dependent variable y that is explained by the...
A driver of a change in the amount of a dependent variable. The independent variable is usually represented by “x”, the dependent variable by “y”, the rate of change by “b”, and the...
Reports too much. If an error overstates the inventory and the company’s net income, the amount of inventory and the amount of net income being reported is more than the correct amount.
To loan money for a limited time in exchange for the borrower’s promise of repayment and interest compensation.
A liability account that reports the estimated amount that a company will have to spend to repair or replace a product during its warranty period. The liability amount is recorded at the time of the sale. (It is also the...
Support that has been either temporarily or permanently restricted by the donor.
In accounting this is the rate used to discount future cash flows in order to determine their present value.
A symbol that indicates the variable cost rate and also the slope of a straight line. For example, in the equation of the straight line, y = a + bx, ‘b’ represents the variable cost rate per unit of...
The person that owes money. If a bank lent you money, the bank is the creditor and you are the debtor.
See perpetual system of inventory.
See manufacturing costs.
See internal rate of return.
In the EOQ model, the holding costs are the incremental costs of storing or holding an item in inventory for one year.
In estimating the ending inventory under the retail method the cost ratio is the cost of goods available divided by the retail value of the goods available.
Magnetic ink character recognition.
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.
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...
A person or business that has a checking account or savings account at a bank.
Life insurance without a cash value.
A current asset account that represents an amount of cash for making small disbursements for postage due, supplies, etc.
To learn more, see Explanation of Depreciation.
See mixed expenses.
A projection or estimate of the future quantities and selling prices of products and/or services.
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.
To repurchase bonds that the company had previously issued.
See fixed manufacturing overhead volume variance.
See Accounting Research Bulletin.
An employee that must be paid overtime pay when the employee’s weekly hours exceed 40 hours. Some states may have additional requirements. Nonexempt employees include both hourly-paid and salary-paid who are not...
In the equation of a straight line, y = a + bx, ‘bx’ is the total variable cost resulting from the variable cost rate ‘b’ multiplied times the quantity ‘x’.
A long-term asset account that reports the cost of real property exclusive of the cost of any constructed assets on the property. Land usually appears as the first item under the balance sheet heading of Property, Plant...
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.
The assigning or dividing up of amounts. For example, depreciation is an allocation process because it assigns an asset’s cost to expense in each of the years the asset is expected to be used. There is also an...
See cash surrender value.
Obligations due within one year of the balance sheet date. (If a company’s operating cycle is longer than one year, an item is a current liability if it is due within the operating cycle.) Another condition is that...
A stockholders’ equity account that generally reports the net income of a corporation from its inception until the balance sheet date less the dividends declared from its inception to the date of the balance...
The best fitting line through a series of points as determined by the least-squares method.
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.
Part of stockholders’ equity representing the fair market value of an asset at the time it was received as a gift. For example, a corporation may be given a large tract of land from a community if the corporation...
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