Term
|
Definition
| the operating expense recorded from uncollectible receivables. |
|
|
Term
|
Definition
| bad debt expense is recorded and the receivable written off when the account is determined to be worthless |
|
|
Term
|
Definition
| required by GAAP for companies with large accounts receivable. Estimates the accounts receivable that will not be collected and records bad debt expense for this estimate at the end of each period using an allowance account. |
|
|
Term
|
Definition
| receivables created by selling merchandise or services on credit |
|
|
Term
| average inventory cost flow method |
|
Definition
| the method of inventory costing that is based upon the assumption that costs should be charged against revenue by using the weighted average unit cost of the items sold. |
|
|
Term
|
Definition
| the cost of the manufactured product sold |
|
|
Term
|
Definition
| the cost of finished products on hand that have not been sold. |
|
|
Term
| first-in, first-out (FIFO) inventory method |
|
Definition
| a method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred |
|
|
Term
| last-in, first-out (LIFO) inventory method |
|
Definition
| a method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue. |
|
|
Term
|
Definition
| the cost of materials that have not yet entered into the manufacturing process. |
|
|
Term
|
Definition
| merchandise on hand (not sold) at the end of an accounting period. |
|
|
Term
|
Definition
| for a receivable, the amount of cash expected to be realized in the future. For inventory, the estimated selling price of an item of inventory less any direct costs of disposal, such as sales commissions. |
|
|
Term
|
Definition
| written claims against debtors who promise to pay the amount of the note plus interest at an agreed upon rate |
|
|
Term
|
Definition
| all money claims against other entities, including people, business firms, and other organizations |
|
|
Term
| specific identification inventory cost flow method |
|
Definition
| an inventory cost flow method where the cost of each inventory unit is separately identified. |
|
|
Term
| work-in-progress (WIP) inventory |
|
Definition
| the direct materials costs, the direct labor costs, and the factory overhead costs that have entered into the manufacturing process but are associated with products that have not been finished. |
|
|
Term
| Lower-of-cost-or-market (LCM) method |
|
Definition
| a method of valuing inventory that reports the inventory at the lower of its cost or current market value (replacement cost). |
|
|
