Accounts payable occurred when a company procured some goods or raw materials from a seller on credit. So, on credit means the company opts for late payment within a stated duration.
Financial statement analysis can be referred to as the analysis of financial reports like balance sheet etc. This analysis can be done quarterly or annually as per the business requirement. It helps to assess the past, current & future financial situations of the business.
A pledged asset is can be referred as the loan risk decrease asset. It helps lenders to decrease the debt risk so that he can provide service with minimal risks involved.
Cash Flow forecast is the process of cash income & expense projection. A business must project cash income & expense for smooth business functioning and to be always ready with cash in hand for any unexpected hurdles.
Cash flow statement represents a company’s cash handling capacity. This statement shows how a company manages its cash, where its generating revenues to fund operating expenses like salaries, rent expense, asset purchase expense etc.
Fair market value is the standard or fair market price of a property at the time of selling or auctioning in the open market.
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 tax is levied on citizens of United States by United States Govt. Under Federal Insurance Contributions Act.
Memo entry doesn’t have any effect on general ledger, journal or balance sheet as it’s not recorded in these accounts.
When expenses occurred without any cash flow then those expenses are termed as “Non-Cash Expenses”. For example, asset depreciation;
Valuation account is a balance sheet which combines with asset & liabilities account to find out the net carrying amount of respective assets and liabilities. Allowance for doubtful accounts, accumulated depreciation etc. termed as a valuation account.
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 defines leftovers in a manufacturing process. These are also called as product wastes. These can be of two types avoidable and unavoidable.
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 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 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 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.
An adjunct account is a valuation account in which recorded assets termed as bonds payable because its credit amount added to bonds payable account.
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 define the rules & regulations of which accounting need to be done. Accounting standards form GAAP (Generally Accepted Accounting Principles).
When the liabilities of a company or entity become higher than assets, this situation called insolvency and the company called as insolvent.
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.
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 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.