Term
| Accounts Receivable (Trade Receivables) |
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Definition
| are open accounts owed to the business by trade customers |
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Term
| aging of accounts receivable method |
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Definition
| estimate uncollectible accounts based on the age of each account receivable |
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Term
| allowance for doubtful accounts |
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Definition
| is a contra-asset account containing the estimated uncollectible accounts receivable |
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Term
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Definition
| bases bad debt expense on an estimate of uncollectible accounts |
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Term
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Definition
| is expense associated with estimated uncollectible accounts receivable |
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Term
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Definition
| is the process of verifying the accuracy of both the bank statement and the cash accounts of a business |
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Term
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Definition
| is a monthly report from a bank that shows deposits recorded, checks cleared, other debits and credits, and a running bank balance |
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Term
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Definition
| is money or any instrument that banks will accept for deposit and immediate credit to a company's accounts such as check, money order, or bank credit |
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Term
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Definition
| are short-term investments with original maturities of three month or less that are readily convertible to case and whose value is unlikely to change |
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Term
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Definition
| is a fee charged by the credit card company for its services |
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Term
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Definition
| are processes by which a company safeguards its assets and provides reasonable assurance regarding the reliability of the company's financial reporting, the effectiveness and efficiency of its operations, and its compliance with applicable laws and regulations |
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Term
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Definition
| are written promises that require another party to pay the business under specified conditions |
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Term
| percentage of credit sales method |
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Definition
| bases of bad debt expense on the historical percentage credit sales that results in bad debts |
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Term
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Definition
| is a cash discount offered to encourage prompt payment of an account receivable |
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Term
| sales returns and allowances |
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Definition
| is a reduction of sales revenues for return or allowances for unsatisfactory goods |
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Term
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Definition
measures the excess of sales prices over the cost to purchase or produce the goods or services sold as a percentage
Gross profit/Net sales |
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Term
| receivables turnover ratio |
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Definition
measures the effectiveness of credit-granting and collection activities
net sales/average net trade accounts receivable |
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Term
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Definition
| uses the weighted method average unit cost of goods sold available for sale for both cost of goods sold and ending inventory |
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Term
| cost of goods sold equation |
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Definition
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Term
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Definition
| refers to the earning of employees who work directly on the products being manufactured |
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Term
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Definition
| are manufacturing costs that are not raw materials or direct labor costs |
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Term
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Definition
| includes manufactured goods that are complete and ready for sale |
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Term
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Definition
| assumes that the first good purchased are the first goods sold |
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Term
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Definition
| refers to the sum of beginning inventory and purchases for the period |
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Term
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Definition
| is a tangible property held for sale in the normal course of business or used in producing goods or services for sale |
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Term
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Definition
| assumes that the most recent purchased units are sold first |
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Term
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Definition
| is a sale of a lower-cost inventory item from beginning LIFO inventory |
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Term
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Definition
| is a contra-asset for the excess of FIFO over LIFO inventory |
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Term
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Definition
| is a valuation method departing from the cost principle; it serves to recognize a loss when replacement cost or net realizable value drops below cost |
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Term
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Definition
| includes goods held for resale in the ordinary course of business |
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Term
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Definition
| is the expected sales prices less selling cost |
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Term
| periodic inventory system |
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Definition
| ending inventory and cost of goods sold are determined at the end of the accounting period based on a physical count |
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Term
| perpetual inventory system |
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Definition
| a detailed inventory record is maintained, recording each purchase and sale during the accounting period |
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Term
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Definition
| is a cash discount received for prompt payment of an account |
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Term
| purchase returns and allowances |
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Definition
| are reductions in the cost of purchases associated with unsatisfactory goods |
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Term
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Definition
| includes items acquired for the purpose of processing into finished goods |
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Term
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Definition
| is the current purchase price for identical goods |
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Term
| specific identification method |
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Definition
| identifies the cost of the specific item that was sold |
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Term
| work in process inventory |
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Definition
| includes goods in the process of being manufactured |
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Term
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Definition
measures the efficiency of inventory management
Cost of goods sold/average inventory |
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Term
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Definition
| is the net cash equivalent amount paid or to be paid for the asset |
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Term
| additions and improvements |
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Definition
| are infrequent expenditures that increase an asset's economic usefulness in the future |
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Term
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Definition
| is the systematic and rational allocation of the acquisition cost of an intangible asset over its useful life |
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Term
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Definition
| increase the productive life, operating efficiency, or capicity of the asset and are recorded as increased in asset accounts, not as expenses. |
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Term
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Definition
| refers to interest expenditures included in the cost of a self constructed asset |
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Term
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Definition
| is the exclusive right to publish, use, and sell a literary, musical, or artistic work |
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Term
| declining-balance depreciation |
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Definition
| method allocates the cost of an asset over its useful life based on a multiple of the straight-line rate |
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Term
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Definition
| is the systematic and rational allocation of the cost of a natural resource over the period of its exploitation |
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Term
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Definition
| is the process of allocating the cost of buildings and equipment over their productive lives using a systematic and rational method |
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Term
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Definition
| is the expected service life of an asset to the present owner |
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Term
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Definition
| is a contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region |
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Term
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Definition
| is the excess of the purchase price of a business over the fair value of business's assets and liabilites |
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Term
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Definition
| have special rights but not physical substance |
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Term
| licenses and operating rights |
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Definition
| obtained through agreements with governmental units or agencies, permit owners to use public property in performing their services |
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Term
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Definition
| are tangible and intangible resources owned by a business and used in its operations over several years |
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Term
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Definition
| are assets that occur in nature, such as mineral dispoits, timber tracts, oil, and gas |
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Term
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Definition
is the acquisition cost of an asset less accumulated depreciation
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Term
| ordinary repairs and maintenance |
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Definition
| are expenditures for normal operating upkeep of long-lived assets |
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Term
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Definition
| is granted by the federal government for an invention; it is an exclusive right given to the owner to use, manufacture, and sell the subject of the patent |
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Term
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Definition
| is the estimated amount to be recovered by the company at the end of the asset's estimated useful life |
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Term
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Definition
| maintain the productive capacity of the asset during the current accounting period only and are recorded as expenses |
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Term
| straight-line depreciation |
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Definition
| method allocated the cost of an asset in equal periodic amounts over its useful life |
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Term
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Definition
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Term
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Definition
| includes cost for computer software and Web development |
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Term
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Definition
| is an exclusive legal right to use a special name, image, or slogan |
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Term
| unit-of-production depreciation |
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Definition
| method allocated the cost of an asset over its useful life based on the relation of its periodic output to its total estimated output |
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Term
| fixed asset turnover ratio |
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Definition
measure how effeciently a company utilized its investments in property, plant, and equipment over time
net sales (operating revenue)/average net fixed assets |
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