The record of checks issued or written, deposits, bank charges, bank credits and the resulting balance. Also referred to as the check register.
The record of checks issued or written, deposits, bank charges, bank credits and the resulting balance. Also referred to as the check register.
The change in total costs in response to the change in some activity. For example, some of the costs of owning and operating a vehicle will increase in total with an increase in miles driven. These are referred to as...
Costs that have both a fixed and variable component. For example, the cost of operating an automobile includes some fixed costs that do not change with the number of miles driven (e.g., operating license, insurance,...
See Allowance for Doubtful Accounts.
An accounting method wherein revenues are recognized when cash is received and expenses are recognized when paid. This method is inferior to the accrual basis of accounting where revenues are recognized when they are...
The long term asset category of a classified balance sheet which appears immediately after the current assets. Listed in this category would be a bond sinking fund, funds held for construction, the cash surrender value...
A liability account that reports an insurance company’s premiums received from its insured that have not yet been earned. For example, if the insurance company receives $600 on January 27 for an insured’s...
A statistic known as the coefficient of determination. This statistic indicates the percent change in the dependent variable that is explained by the change in the independent variable(s).
A structured market for trading stocks and bonds such as the New York Stock Exchange or NASDAQ. Capital market can also include less structured markets such as private placements.
The cash amounts received after deducting the related income taxes and also the cash amounts paid after deducting the cash saved when the amounts are income tax deductible.
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...
See budgetary slack.
A check drawn on a bank. A cashier’s check leaves no doubt that the funds represented by the check are real. A bank money order or a certified check would also assure the payee that the funds are in the bank.
An original record containing the details to substantiate a transaction entered in an accounting system. For example, the source document for a purchase of merchandise is the supplier’s invoice supported by the...
The first-in, first-out cost flow assumumption under the perpetual inventory system. The first (oldest) costs are the first costs removed from inventory at the time that goods are sold. The most recent costs will remain...
A cash dividend that has been declared by the board of directors, but not yet paid.
The owner’s equity account that contains the amount invested in the sole proprietorship by Matt Jones plus the net income since the company began minus the draws made by Matt Jones since the company began. The...
See sole proprietorship.
Generally a long term liability account containing the face amount, par amount, or maturity amount of the bonds issued by a company that are outstanding as of the balance sheet date. To learn more about bonds payable,...
An accounting entry with only one account being debited and only one account being credited.
A donor-imposed restriction on net assets that requires using the assets within a specified passage of time.
A shortened version of the term bank reconciliation or bank statement reconciliation.
A loan from a bank or other lender for which the borrower is not required to pledge assets as collateral for the loan.
Often referred to as write-up work, a compilation refers to financial statements prepared by an accountant without reviewing or auditing the amounts. Often the accountant merely takes a client’s amounts and...
The activities provided by a nonprofit in carrying out one of its major programs.
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...
The ratio of current assets to current liabilities. This ratio is an indicator of a company’s ability to meet its current obligations. To learn more, see Explanation of Financial Ratios.
See Explanation of Inventory and Cost of Goods Sold.
The operating activities of a company, excluding the major segments of the company that are being discontinued.
The formal planning for significant expenditures, such as property, plant and equipment.
A technique used to determine the variable rate (slope of a total cost line) of an independent variable and the fixed amount by using just two points: the highest point and the lowest point. For example, if at the...
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...
Under the accrual method of accounting, this account reports the employer’s expense for the company’s 401(k) plan associated with the employees in the delivery department during the period indicated in the...
The owner’s equity account that contains the amount invested in the sole proprietorship by Mary Smith plus the net income since the company began minus the draws made by Mary Smith since the company began. The...
See double declining balance method of depreciation.
See accrued rent expense. Also see accrued rent income.
See chief financial officer.
The optimum purchase (or production) quantity which minimizes the combined total cost of carrying inventory and processing additional purchase orders (or production setups).
See deferral-type adjusting entry.
The underlying true cause of a cost occurring. In other words, the root cause is more than a mere correlation between an event and a cost. There is a real cause and effect relationship.
Featured Review
"As a trainer/lecturer of English for Specific Purposes with a focus on Financial and Business English, AccountingCoach.com is THE website I recommend to my students. They are speakers of other languages and AccountingCouch.com makes the world of finance and Accounting in English accessible to them. They need nothing more to convince themselves of accounting and finance terminology. This is their go-to resource. Apart from improving their English levels, professionally they gain insight as well. They are getting core information, updates, and learn about trends. To this effect many students have commented. Your website is also a tremendous support to me when it comes to doing quizzes, finding material to improve reading skills and when setting exam papers. And all of that for free! Thank you Mr Averkamp. For sharing your knowledge, for making such a contribution to education, for reaching students across the globe. You are changing the world. With sincere gratitude!" - Trudie F.
Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials
Read all 2,645 reviews
For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.
We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping: