Term
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Definition
| sum of costs incurred bringing an article to useable/salable condition and location |
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Term
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Definition
| = (# units sold) * (sales price) |
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Term
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Definition
= (# units sold) * (unit costs)
= BI + P - EI
(beg inv + purchases - end inv) |
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Term
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Definition
= BI + P
(beg inv + purchases) |
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Term
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Definition
(cost of goods avail for sale)
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(# of units avail for sale) |
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Term
| 4 types of inventory costing methods |
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Definition
-FIFO
-LIFO
-Weighted Avg Method
-Specific Identification Method |
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Term
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Definition
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Term
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Definition
a contra-asset account for the excess of FIFO over LIFO inventory
Diff in BI = BI LIFO - BI FIFO
Diff in EI = EI LIFO - BI FIFO
Diff in COGS = (Diff in BI) - (Diff in EI) |
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Term
| lower of cost or market (LCM) |
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Definition
if (cost is lower)
done.
else (NRV is lower)
COGS (diff)
Inventory (diff)
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Term
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Definition
COGS
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Avg Inventory
Measures how many times inv was produced and sold during period.
Inc - means inv moves quickly through production to customer, reducing overhead. |
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Term
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Definition
(net sales)
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(avg net fixed assets)
Measures sales dollars generated by each dollar of fixed asset used.
Inc - means efficient mgt of fixed assets. |
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Term
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Definition
huge additions that increase the productive life or efficiency
--added to asset account. |
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Term
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Definition
maintain productive capacity for current period
--not added to assets. |
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Term
| ordinary repairs and maintenance |
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Definition
| expenditures for normal operating upkeep |
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Term
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Definition
| infrequent expenditures that increase usefulness in the future. |
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Term
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Definition
| 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
| = (acquisition cost) - (accumulated depr) |
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Term
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Definition
| salvage value - estimated amount to be recovered at end of the useful life |
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Term
| straight-line depreciation |
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Definition
(cost - residual)
----------------- = depr expense
(useful life) |
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Term
| units-of-production depreciation |
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Definition
(cost - residual)
----------------- * (actual production) = depr expense
(useful life) |
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Term
| double-declining balance depreciation |
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Definition
(cost - accum depr)
------------------- * 2 = depr expense
(useful life) |
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Term
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Definition
occurs if (future cash flow < book value)
then record an asset impairment loss |
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Term
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Definition
| depreciation of an intangible asset |
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Term
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Definition
(purchase price of a business) - (fair market value of the business' assets & liab)
Means the favorable reputation that a company has with its customers.
The only way to report goodwill as an asset is to purchase another business. |
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Term
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Definition
| probable deobts or obligations of the entity that result from past transactions, and will be paid with assets or services. |
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Term
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Definition
| (current assets) - (current liabilities) |
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Term
| accounts payable turnover ratio |
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Definition
COGS
---------------
Avg Acc Payable
Measures how quickly mgt is paying trade accounts.
Inc - means paying quickly. |
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Term
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Definition
| paid by both employee and employer |
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Term
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Definition
| interest associated with the use of money over time |
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Term
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Definition
| revenues that have been collected but not earned |
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Term
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Definition
| a potential liability that has arisen as a result of a past event, but is not an effective liability until some future event occurs. |
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Term
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Definition
does not meet any of the 4 GAAP criteria:
1) lease term at least 75% of expected life
2) ownership transferred at end of lease
3) lease allows purchase of asset at a price below market value
4) present value of lease payments at least 90% of fair market value of asset |
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Term
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Definition
meets at least 1 of 4 GAAP criteria:
1) lease term at least 75% of expected life
2) ownership transferred at end of lease
3) lease allows purchase of asset at a price below market value
4) present value of lease payments at least 90% of fair market value of asset |
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Term
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Definition
| a series of periodic cash receipts or payments that are equal in amount each interest period |
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Term
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Definition
| the difference between income tax expense and current taxes payable, caused by diff rules for GAAP statements & IRS tax returns. |
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Term
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Definition
| timing differences that cause deferred income taxes and will reverse in the future. |
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Term
| defined contribution plan |
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Definition
| employer makes cash payments to an investment fund, and when employee retires he is entitled to part of the fund. |
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Term
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Definition
| employee's retirement benefits are based on a % of their pay at retirement or the number of years of employment. |
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Term
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Definition
| unsecured bond, no assets are specifically pledged to guarantee re-payment |
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Term
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Definition
amount payable at maturity of a bond and on which periodic cash interest payments are computed
also called: par value, face amount, maturity value |
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Term
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Definition
| bond contract that specifieds the legal provisions of a bond issue |
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Term
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Definition
| may be called for early retirement at the option of the issuer |
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Term
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Definition
| may be converted to other securities of the issuer |
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Term
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Definition
| gets preference over other creditors if bankruptcy, etc |
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Term
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Definition
| paid off after some other creditors |
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Term
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Definition
total liabilities
------------------
owner's equity
Measures relationship between amount capital provided by creditors and amount provided by owners.
High - means company relies heavily on funds provided by creditors, increases risk |
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Term
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Definition
stated rate of interest on bonds
also called: contract, stated rate |
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Term
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Definition
current interest rate on debt when incurred
also called: yield, effective interest rate |
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Term
| when does a bond sell at par? |
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Definition
| stated rate = market rate |
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Term
| when does a bond sell at a premium? |
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Definition
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Term
| when does a bond sell at a discount? |
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Definition
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Term
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Definition
NI + Int Exp + Inc Tax Exp
--------------------------
Int Exp
Measures the amount of resources generated for each dollar of interest expense
High - means extra margin of protection in case profitability deteriorates. |
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Term
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Definition
coupon rate=0, pay no cash interest.
issue price is computed by present value principle only. |
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Term
| straight-line amortization |
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Definition
| a simplified method that allocates an equal dollar amount to each interest period |
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Term
| how are gains or losses recorded when bonds are retired early? |
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Definition
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Term
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Definition
| an exclusive legal right to use a special name, image, or slogan |
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Term
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Definition
| the exclusive right to publish, use, and sell a literary, muscial, or artistic work. |
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Term
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Definition
granted by federal govt for an invention;
exclusive right given to owner to use, manufacture, and sell the patented product |
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Term
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Definition
| a contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region |
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