A management tool that identifies the critical path—the path of sequential activities requiring the longest time to complete.
A management tool that identifies the critical path—the path of sequential activities requiring the longest time to complete.
A listing of the general ledger accounts and their account balances at a point in time after the adjusting entries have been posted. The grand total of the accounts with debit balances should equal the grand total of the...
The compensation earned by hourly-paid employees during the interval of time indicated in the heading of the income statement. Under the accrual basis of accounting, the date that wages are paid does not determine when...
The result of dividing a corporation’s net income by the average amount of common stockholders’ equity during the time interval when the net income was earned. To learn more about this ratio, see Explanation...
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.
A series of equal amounts occurring at the end of each equal time interval. Also known as an annuity in arrears. An example is the monthly payments on a loan. Another example is the semiannual interest on a bond.
To loan money for a limited time in exchange for the borrower’s promise of repayment and interest compensation.
The expense incurred during the time interval indicated on the income statement for using rented equipment.
Billing a client based on the value of the information or service provided rather than billing based on time spent.
A classification on a single-step income statement for both operating and nonoperating expenses and losses that pertain to the time interval shown in the heading of the income statement.
A non-operating item that results from the sale of a long-term asset at an amount greater than the carrying amount (book value) of the truck at the time it is sold.
A process which discounts future cash flows to the present in order to reflect the time value of money. Examples of the discounted cash flow model are net present value and internal rate of return.
A term used to describe the net present value method and the internal rate of return. The model discounts future cash flows back to the present time.
The amount of office supplies used during a specified time interval.
A table showing the present value factors to be applied to the recurring equal amount occurring at the end of each equal time interval.
The income statement account which contains a portion of the cost of equipment that is being expensed during the time interval shown in the heading of the income statement.
A series of equal amounts occurring at the beginning of each equal time interval. Also known as an annuity in advance. An example would be the monthly rent on an apartment.
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...
Allowing a person or company to purchase goods or services without paying cash at the time of purchase.
A miscellaneous expense account used to record the difference between the amount of cash needed to replenish a petty cash fund and the amount of petty cash receipts at the time the petty cash fund is replenished.
A special or specialized journal to record sales of merchandise to customers. In a manual system this saves a significant amount of recording time. In today’s computerized environment, sales are recorded...
The amount of temporary staffing costs that were used during the time interval indicated in the heading of the income statement.
A table showing the present value factors to be applied to the constant amount occurring at the beginning of each equal time interval. Also known as the present value table for an annuity in advance.
The amount by which the proceeds from the sale of an automobile used in the business exceeded its carrying amount at the time it is sold.
The cost to operate office equipment during a specified time interval.
A table showing present value factors for various interest rates and numbers of years/periods for a single amount at a future point in time.
A term often used in present value calculations to distinguish a one-time cash amount from an annuity (or series of equal payments).
The discounted value of a series of equal amounts occurring at the beginning of each equal time interval.
The income statement account which contains a portion of the cost of plant and equipment that is being matched to the time interval shown in the heading of the income statement. (There is no depreciation expense for...
In business decision-making, payback means the number of years before the cash invested in a project is returned. It involves the cash flows from the project but generally the cash flows are not discounted to reflect the...
The time between when a check is written and when the check clears the bank account on which it is drawn.
The discounted value of a series of equal amounts occurring at future points with equal time intervals.
A series of equal amounts occurring at the end of each equal time interval. Also known as an ordinary annuity. An example would be the monthly payments on a loan. Another example is the semiannual interest on a bond.
A series of equal amounts at equal time intervals. Also see annuity due, annuity in advance, annuity in arrears, and ordinary annuity.
The discounted value of a series of equal amounts occurring at the end of each equal time interval. To learn more, see our Present Value of an Ordinary Annuity Outline.
The amount by which the proceeds from the sale of equipment (that had been used in the business) exceeded its carrying amount at the time it is sold.
or Practice Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page. 1. The time between the placing of an order and the receipt of the goods that were ordered is...
financial statements and at the same time use accelerated depreciation on its income tax returns. Using accelerated depreciation on its U.S. income tax returns will mean greater depreciation expense and smaller taxable...
on a project. There are two weaknesses with the payback method: 1) the time value of money is not considered, and 2) the cash flows occurring after the cash is paid back is ignored. Accounting rate of return or return...
there is an overdraft protection agreement. Many companies write checks for more than the amount on deposit in their checking accounts, but the checks do not cause a bank overdraft. The reason is the delay between the...
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