## What is Estimating Ending Inventory?

Ending inventory estimation is a difficult task to carry out. Ending inventory is the amount of ending units of inventory at the end of a month or fiscal year.

## What is Income Tax Form 16?

Income tax form 16 is issued by an employer to its employee as a proof of the amount deducted as income tax has been deposited. Income tax form issued on annual basis i.e. every year on or before May 31st.

## Static Budget

Static Budget can be defined as the budget which never changes irrespective of the actual result. For example: If the operating expense goes above fixed amount then also this budget will not change.

## Social Security Taxes

Social Security tax is levied on citizens of United States by United States Govt. Under Federal Insurance Contributions Act.

## MEMO Entry

Memo entry doesn’t have any effect on general ledger, journal or balance sheet as it’s not recorded in these accounts.

## Non Cash Expenses

When expenses occurred without any cash flow then those expenses are termed as “Non-Cash Expenses”. For example, asset depreciation;

## Prime Cost

prime costs are directly related to production costs. These costs are consumed during the production process. It includes the labor cost and raw material cost as raw material and labor are the prime inputs in manufacturing a product.

## Spoilage

Spoilage defines leftovers in a manufacturing process. These are also called as product wastes. These can be of two types avoidable and unavoidable.

## Hurdle Rate

The hurdle rate is the minimal amount of rate of return an investor needed from his investment in a project. It also called as “minimum acceptable rate of return” (MAAR).

## Simple linear regression analysis

Simple linear regression analysis is a statistical method used to find out the relationship between two variables i.e. one independent and one dependent. Regression analysis helps to analyze data and ultimately reach a conclusion,

## Inventoriable Costs

Inventoriable costs are most associated with retail businesses. These costs are incurred during the process of obtaining a product and up to selling the product including holding cost, inventory transfer cost etc.

## High-Low Method

High-low method commonly used to distinguish the variable & fixed price by analyzing some given data. This price or cost can be of a product, product line, geographical sales region, store etc. This method also used to ascertain a budget.

## Variance Analysis

Variance analysis is simply a method to find out the difference between planned goals and actual or achieved goals. In terms of budgeting, it’s the difference between planned budget and actual budget spent or revenue achieved.

## Accounting Standards

Accounting standards define the rules & regulations of which accounting need to be done. Accounting standards form GAAP (Generally Accepted Accounting Principles).

## Insolvent

When the liabilities of a company or entity become higher than assets, this situation called insolvency and the company called as insolvent.

## Budget variance

Budget variance is the difference between the budgeted or planned total amount of revenue or expense and the actual amount of revenue or expense. Budget variance helps a business owner to fix an achievable target amount in a year after evaluating last years budget difference.

## Zero Based Budgeting

Zeo based budgeting stands on the concept of zero-base. Every business plans out a budget plan for every year and never go for a recheck on all activities those included in the budget.

## Average Collection Period

Average collection period is the total time a business undertakes to collect its payments for the goods or services sold in terms of credit. Collection period is different from companies to companies.

## Margin of safety

The margin of safety is the safety level before a company reaches its breakeven point. A margin of safety shows a company’s sales level after which the sales value will decrease. A margin of safety is the most needed factor for an investor to analyze the company’s current situation.

## Payback Period

The payback period is the time needed to recover the total cash invested. Payback period is an important factor for taking up any investment or project or not. Projects with shorter time payback period are most preferable than ones with longer payback period.

## Reorder Point

Reorder point is the level where the stock needs to fill again. Usually, what happens a company always set a minimum amount level of a stock and the stock needs to record for reordering when it reaches that level.