Difference between revisions of "Net income"

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[[Acid test ratio]] is a liquidity ratio; those assets that are most easily converted to cash are divided by current liabilities to indicate ability to pay off short-term debt. Also called quick ratio.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Acid test ratio]]. A liquidity ratio; those assets that are most easily converted to cash are divided by current liabilities to indicate ability to pay off short-term debt. Also called quick ratio.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Quick asset]] is those assets — mainly cash, accounts receivable, and notes receivable—that can be easily turned into cash.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Quick asset]]. Those assets — mainly cash, accounts receivable, and notes receivable—that can be easily turned into cash.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Accounts receivable turnover ratio]] is a ratio that indicates the number of times accounts receivable are converted to cash within a given period and the effectiveness of a company's credit policy.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Accounts receivable turnover ratio]]. A ratio that indicates the number of times accounts receivable are converted to cash within a given period and the effectiveness of a company's credit policy.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Average collection period]] is a ratio that shows how quickly moneys owed are received from customers and thereby measures how effectively a company collects its accounts receivable.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Average collection period]]. A ratio that shows how quickly moneys owed are received from customers and thereby measures how effectively a company collects its accounts receivable.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Inventory turnover ratio]] is an asset management ratio that indicates how quickly inventory moves off the shelf and therefore how well a company sells its product.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Inventory turnover ratio]]. An asset management ratio that indicates how quickly inventory moves off the shelf and therefore how well a company sells its product.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Asset turnover ratio]] is a ratio that indicates how efficiently a company uses its assets to generate sales and thus helps measure the overall efficiency of the company.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Asset turnover ratio]]. A ratio that indicates how efficiently a company uses its assets to generate sales and thus helps measure the overall efficiency of the company.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Debt to total assets ratio]] is a ratio that shows how much of a company's assets are financed by creditors.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Debt to total assets ratio]]. A ratio that shows how much of a company's assets are financed by creditors.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Debt to stockholders' equity ratio]] is a ratio in which total liabilities are divided by the amount of stock that is owned to measure the risk creditors run in comparison with stockholders.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Debt to stockholders' equity ratio]]. A ratio in which total liabilities are divided by the amount of stock that is owned to measure the risk creditors run in comparison with stockholders.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Times interest earned ratio]] is a debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called [[interest coverage ratio]].
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Times interest earned ratio]]. A debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called [[interest coverage ratio]].
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Gross profit rate]] is a profitability ratio that indicates how well net sales cover administrative and selling expenses.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Gross profit rate]]. A profitability ratio that indicates how well net sales cover administrative and selling expenses.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Return on sales ratio]] is a profitability ratio that shows the relationship of net income before taxes to net sales and thereby the effectiveness of a company's pricing policy.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Return on sales ratio]]. A profitability ratio that shows the relationship of net income before taxes to net sales and thereby the effectiveness of a company's pricing policy.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Return on total assets ratio]] is a profitability ratio that measures how wisely a company has invested in and managed its assets. This ratio can be arrived at in two ways: (1) net income before interest and taxes divided by total assets and (2) return on sales multiplied by asset turnover.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Return on total assets ratio]]. A profitability ratio that measures how wisely a company has invested in and managed its assets. This ratio can be arrived at in two ways: (1) net income before interest and taxes divided by total assets and (2) return on sales multiplied by asset turnover.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Voucher]] is a written authorization form containing data about a transaction along with proper authorizations for payment, account distributions, and so forth.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Voucher]]. A written authorization form containing data about a transaction along with proper authorizations for payment, account distributions, and so forth.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Voucher system]] is an internal control system designed to control a company's cash payments.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Voucher system]]. An internal control system designed to control a company's cash payments.
 
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−
==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Voucher register]] is a special journal replacing the purchases journal; it records prenumbered vouchers at the time the liabilities are incurred.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Voucher register]]. A special journal replacing the purchases journal; it records prenumbered vouchers at the time the liabilities are incurred.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Vouchers Payable]] is a liability account in the general ledger that represents the controlling account for the sum of individual vouchers.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Vouchers Payable]]. A liability account in the general ledger that represents the controlling account for the sum of individual vouchers.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Unpaid voucher file]] ([[tickler file]]) is the file containing unpaid vouchers arranged by due dates to take advantage of cash discounts.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Unpaid voucher file]] ([[tickler file]]). The file containing unpaid vouchers arranged by due dates to take advantage of cash discounts.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Check register]] is a special journal that replaces the cash payments journal in recording payments of vouchers.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Check register]]. A special journal that replaces the cash payments journal in recording payments of vouchers.
 
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−
==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Paid voucher file]] is the file that holds paid vouchers filed either in sequential order by voucher number or alphabetically by creditor's name.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Paid voucher file]]. Holds paid vouchers filed either in sequential order by voucher number or alphabetically by creditor's name.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Profit center]] is a unit or department that incurs costs and generates [[Fiscal Revenue|revenue]]s.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Profit center]]. A unit or department that incurs costs and generates [[Fiscal Revenue|revenue]]s.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Cost center]] is a unit or department that incurs costs but does not generate [[Fiscal Revenue|revenue]]s.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Cost center]]. A unit or department that incurs costs but does not generate [[Fiscal Revenue|revenue]]s.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Direct expenses]] are expenses that can be traced directly to a specific department.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Direct expenses]]. Expenses that can be traced directly to a specific department.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Indirect expenses]] are expenses that cannot be traced directly to one department.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Indirect expenses]]. Expenses that cannot be traced directly to one department.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Contribution margin]] is a department's net profit, used to cover indirect expenses.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Contribution margin]]. A department's net profit, used to cover indirect expenses.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Raw material]] is material that is to be processed into a finished product or that changes the quality or characteristics of the product.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Raw material]]. Material that is to be processed into a finished product or that changes the quality or characteristics of the product.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Direct labor]] is the wages of those persons whose efforts directly affect the quality or other characteristics of the products manufactured.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Direct labor]]. The wages of those persons whose efforts directly affect the quality or other characteristics of the products manufactured.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Manufacturing overhead]] is all the manufacturing costs except raw material and direct labor.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Manufacturing overhead]]. All the manufacturing costs except raw material and direct labor.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Receiving report]] is a document prepared by the receiving department to evidence the receipt of material or supplies that had been ordered.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Receiving report]]. A document prepared by the receiving department to evidence the receipt of material or supplies that had been ordered.
 
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==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Material requisition]] is a document used to order material or supplies from the storeroom that provides the basis for charging material into production.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
−
:[[Material requisition]]. A document used to order material or supplies from the storeroom that provides the basis for charging material into production.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Clock card]] is a card used by employees when clocking in and out of the factory; it becomes the basis for the payroll.
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Clock card]]. A card used by employees when clocking in and out of the factory; it becomes the basis for the payroll.
 
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==Related concepts==
 
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*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
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==Related coursework==
 
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*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Lot ticket]] is a document prepared to show the movement of materials or products between departments. Also called [[move ticket]].
 
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==Definitions==
 
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According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
 
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:[[Lot ticket]]. A document prepared to show the movement of materials or products between departments. Also called [[move ticket]].
 
−
 
−
==Related concepts==
 
−
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]].
 
−
 
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==Related coursework==
 
−
*[[Principles of Accounting]].
 
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[[Category: Accounting]][[Category: Articles]]
 
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[[Labor distribution report]] is a report issued by the payroll department to categorize all the types of labor incurred during the week.
 
[[Labor distribution report]] is a report issued by the payroll department to categorize all the types of labor incurred during the week.
  

Revision as of 11:42, 20 December 2018

Labor distribution report is a report issued by the payroll department to categorize all the types of labor incurred during the week.


Contents

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Labor distribution report. A report issued by the payroll department to categorize all the types of labor incurred during the week.

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Bill of lading is a formal document issued to the carrier of the finished product. It is the basis for charging the cost of goods sold.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Bill of lading. A formal document issued to the carrier of the finished product. It is the basis for charging the cost of goods sold.

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Return on common stockholders' equity ratio is a profitability ratio that indicates how well a company is managing debt financing to earn a profit for holders of common stock.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Return on common stockholders' equity ratio. A profitability ratio that indicates how well a company is managing debt financing to earn a profit for holders of common stock.

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Corporation is a business organization that is both a legal and accounting entity.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Corporation. Business organization that is both a legal and accounting entity.

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Incorporator is a person responsible for getting the corporation formed.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Incorporator. A person responsible for getting the corporation formed.

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Articles of incorporation is the document submitted by incorporators when applying for a charter.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Articles of incorporation. Document submitted by incorporators when applying for a charter.

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Charter is a document issued to a corporation by the state that includes certificate of incorporation along with articles of incorporation.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Charter. Document issued to a corporation by the state that includes certificate of incorporation along with articles of incorporation.

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Certificate of incorporation is a document granted by the state authorizing the creation of a corporation.

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Certificate of incorporation. Document granted by the state authorizing the creation of a corporation.

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Stockholder is an owner of the stock of the corporation.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Stockholder. An owner of the stock of the corporation.

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Corporate director is an officer elected by stockholders to represent the company and establish policies for the company.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Corporate director. An officer elected by stockholders to represent the company and establish policies for the company.

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Minute book is the book that records meetings of the board of directors or stockholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Minute book. Book that records meetings of the board of directors or stockholders.


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Limited liability is freedom of stockholders from personal liability for the debts of the corporation.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Limited liability. Freedom of stockholders from personal liability for the debts of the corporation.

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Stock certificate is a formal document issued to investors in a corporation that shows the number of shares purchased.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Stock certificate. Formal document issued to investors in a corporation that shows the number of shares purchased.

Related concepts

Related coursework

Paid-In Capital is a section of stockholders' equity representing what stockholders have invested into the corporation.

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Paid-In Capital. Section of stockholders' equity representing what stockholders have invested into the corporation.


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Retained Earnings are accumulated profits of a corporation that have been kept in the business and not paid out as dividends. Retained Earnings is part of stockholders' equity.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Retained Earnings. Accumulated profits of a corporation that have been kept in the business and not paid out as dividends. Retained Earnings is part of stockholders' equity.

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Capital stock is classes of stock that represent the fractional elements of ownership of a corporation.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Capital stock. Classes of stock that represent the fractional elements of ownership of a corporation.

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Authorized capital stock is the number of shares of capital stock (common and preferred) that a corporation can sell.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Authorized capital stock. The number of shares of capital stock (common and preferred) that a corporation can sell.

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Issued capital stock is stock that the corporation issues for assets or services contributed by the stockholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Issued capital stock. Stock that the corporation issues for assets or services contributed by the stockholders.

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Outstanding capital stock is stock that is held and owned by stockholders. Common stock Part of paid-in capital representing the basic ownership equity of the corporation. If the corporation has only one class of stock, it will be common stock.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Outstanding capital stock. Stock that is held and owned by stockholders. Common stock Part of paid-in capital representing the basic ownership equity of the corporation. If the corporation has only one class of stock, it will be common stock.

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Preemptive right is the right of the stockholder to purchase additional shares of stock to maintain a proportionate interest when the corporation issues additional stock.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Preemptive right. The right of the stockholder to purchase additional shares of stock to maintain a proportionate interest when the corporation issues additional stock.

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Preferred stock is class of capital stock that has preference to a corporation's profits and assets.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Preferred stock. Class of capital stock that has preference to a corporation's profits and assets.

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Dividend is cash, other assets, or shares of stock that a corporation issues to the stockholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Dividend. Cash, other assets, or shares of stock that a corporation issues to the stockholders.

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Cumulative preferred stock is stock that entitles its holders to any undeclared dividends that have accumulated before common stockholders receive their dividends.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Cumulative preferred stock. Stock that entitles its holders to any undeclared dividends that have accumulated before common stockholders receive their dividends.

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Related coursework

Dividends in arrears are the dividends owed to cumulative preferred stockholders that must be paid before common stockholders can receive their dividends.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Dividends in arrears. Dividends owed to cumulative preferred stockholders that must be paid before common stockholders can receive their dividends.

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Noncumulative preferred stock is preferred stock that does not entitle its holders to a dividend for any year in which a dividend is not declared. *Nonparticipating preferred stock. Preferred stock that entitles its holders only to a certain percentage of dividend, the remainder going to holders of common stock.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Noncumulative preferred stock. Preferred stock that does not entitle its holders to a dividend for any year in which a dividend is not declared. *Nonparticipating preferred stock. Preferred stock that entitles its holders only to a certain percentage of dividend, the remainder going to holders of common stock.

Related concepts

Related coursework

Participating preferred stock is stock that entitles its holders not only to a fixed dividend but also to an opportunity to share in additional dividends with common stockholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Participating preferred stock. Stock that entitles its holders not only to a fixed dividend but also to an opportunity to share in additional dividends with common stockholders.

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Related coursework

Par value is an arbitrary value that is placed on each share of stock. Par value represents legal capital and not market value.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Par value. An arbitrary value that is placed on each share of stock. Par value represents legal capital and not market value.

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Legal capital is minimum amount of capital that a corporation must leave in the company (cannot be withdrawn by stockholders) for the protection of the creditors.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Legal capital. Minimum amount of capital that a corporation must leave in the company (cannot be withdrawn by stockholders) for the protection of the creditors.

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Related coursework

No-par stock is stock with no par value. A stated value could be placed on it.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

No-par stock. Stock with no par value. A stated value could be placed on it.

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Related coursework

Stated value is arbitrary value placed by the board of directors on each share of no-par stock to fulfill legal capital requirements.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Stated value. Arbitrary value placed by the board of directors on each share of no-par stock to fulfill legal capital requirements.

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Premium is a term that records the sale of stock at more than par value. In this book we use the account Paid-In Capital in Excess of Par Value to record the premium received.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Premium. A term that records the sale of stock at more than par value. In this book we use the account Paid-In Capital in Excess of Par Value to record the premium received.

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Related coursework

Common Paid-In Capital in Excess of Par Value is the difference between what stockholders invest and par value. This amount is not credited to the Common Stock account.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Common Paid-In Capital in Excess of Par Value. Difference between what stockholders invest and par value. This amount is not credited to the Common Stock account.

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Related coursework

Discount on stock is the difference between the par value of the stock and an amount less than the par value that the stockholders have contributed. Discounts do not happen often.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Discount on stock. The difference between the par value of the stock and an amount less than the par value that the stockholders have contributed. Discounts do not happen often.

Related concepts

Related coursework

Common Paid-In Capital in Excess of Stated Value is the difference between what stockholders invest and the stated value placed on stock by the board of directors. This amount is not credited to the Common Stock account.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Common Paid-In Capital in Excess of Stated Value. Difference between what stockholders invest and the stated value placed on stock by the board of directors. This amount is not credited to the Common Stock account.

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Organization cost is an intangible asset that records the initial cost of forming the corporation, such as legal and incorporating fees. Today, it is being expensed.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Organization cost. An intangible asset that records the initial cost of forming the corporation, such as legal and incorporating fees. Today, it is being expensed.

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Stock subscription is a contractual agreement to buy a certain number of shares of stock from a corporation at a specific price.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Stock subscription. A contractual agreement to buy a certain number of shares of stock from a corporation at a specific price.

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Related coursework

Common Stock Subscribed is a temporary stockholders’ equity account that records at par value stock that has been subscribed to but not fully paid for.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Common Stock Subscribed. Temporary stockholders’ equity account that records at par value stock that has been subscribed to but not fully paid for.

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Related coursework

Common Stock Subscriptions Receivable is current asset on balance sheet that represents amount due on stock subscriptions.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Common Stock Subscriptions Receivable. Current asset on balance sheet that represents amount due on stock subscriptions.

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Related coursework

Source-of-capital approach is method of preparing Paid-In Capital by listing classes of stockholder sources of capital. Legal capital approach Method of preparing Paid-In Capital by listing the legal section first.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Source-of-capital approach. Method of preparing Paid-In Capital by listing classes of stockholder sources of capital. Legal capital approach Method of preparing Paid-In Capital by listing the legal section first.

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Redemption value is the price per share a corporation pays to redeem or retire capital stock.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Redemption value. The price per share a corporation pays to redeem or retire capital stock.

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Related coursework

Market value is the price that a buyer pays to purchase shares of capital stock in the open market. Of course, for every buyer there is a seller.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Market value. The price that a buyer pays to purchase shares of capital stock in the open market. Of course, for every buyer there is a seller.

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Book value per share is amount of net assets that a stockholder would receive on a per share basis, assuming no gain or loss on the sale of the assets.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Book value per share. Amount of net assets that a stockholder would receive on a per share basis, assuming no gain or loss on the sale of the assets.

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Related coursework

Dividend is cash or other assets that a corporation distributes as earnings to stockholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Dividend. Cash or other assets that a corporation distributes as earnings to stockholders.

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Related coursework

Date of declaration is the date upon which the board of directors of a corporation formally declares a dividend.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Date of declaration. The date upon which the board of directors of a corporation formally declares a dividend.

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Dividend is payable liability showing amount of cash dividend owed.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Dividend. Payable Liability showing amount of cash dividend owed.

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Related coursework

Date of record is the date of ownership that determines which stockholders will receive the dividend.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Date of record. The date of ownership that determines which stockholders will receive the dividend.

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Related coursework

Date of payment is the date the dividend is paid. *Cash dividend. Dividend that is paid in cash.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Date of payment. The date the dividend is paid. *Cash dividend. Dividend that is paid in cash.

Related concepts

Related coursework

Stock dividend is stock that is distributed to stockholders instead of cash or other assets.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Stock dividend. Stock that is distributed to stockholders instead of cash or other assets.

Related concepts

Related coursework

Common Stock Dividend is distributable Stockholders' equity account that accumulates a stock dividend that has been declared but not yet issued and distributed.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Common Stock Dividend. Distributable Stockholders' equity account that accumulates a stock dividend that has been declared but not yet issued and distributed.

Related concepts

Related coursework

Stock split is issuing of additional shares of stock to stockholders; total par or stated value remains the same.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Stock split. Issuing of additional shares of stock to stockholders; total par or stated value remains the same.

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Related coursework

Treasury stock is stock that has been issued but has been bought back by the corporation or received as a gift.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Treasury stock. Stock that has been issued but has been bought back by the corporation or received as a gift.

Related concepts

Related coursework

Paid-In Capital from Treasury Stock is stockholders' equity account that records amounts more or less than par value of treasury stock sold. The balance of this account can never be negative.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Paid-In Capital from Treasury Stock. Stockholders' equity account that records amounts more or less than par value of treasury stock sold. The balance of this account can never be negative.

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Related coursework

Appropriated retained earnings (restricted retained earnings) is that portion of Retained Earnings that is not available for dividends.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Appropriated retained earnings (restricted retained earnings). That portion of Retained Earnings that is not available for dividends.

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Related coursework

Statement of retained earnings is a financial report that reveals the changes in retained earnings for a particular period of time.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Statement of retained earnings. A financial report that reveals the changes in retained earnings for a particular period of time.

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Related coursework

Prior period adjustment is correction made in the current year of a mistake made in previous years. The adjustment is updated on the statement of retained earnings.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Prior period adjustment. Correction made in the current year of a mistake made in previous years. The adjustment is updated on the statement of retained earnings.

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Bond is an interest-bearing note payable usually in $1,000 denominations issued by a corporation to a large group of lenders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Bond. An interest-bearing note payable usually in $1,000 denominations issued by a corporation to a large group of lenders.

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Related coursework

Bond certificate is a piece of paper held by a bondholder showing evidence of a bond issued by a corporation to be payable on a specified date for a specific sum to the order of the person named in the bond certificate or to the bearer.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Bond certificate. A piece of paper held by a bondholder showing evidence of a bond issued by a corporation to be payable on a specified date for a specific sum to the order of the person named in the bond certificate or to the bearer.

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Related coursework

Face value is the amount the corporation must repay to the bondholder at the maturity date.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Face value. The amount the corporation must repay to the bondholder at the maturity date.

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Related coursework

Contract rate is rate of interest (based on face value) stated on bond certificate and bond indenture.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Contract rate. Rate of interest (based on face value) stated on bond certificate and bond indenture.

Related concepts

Related coursework

Bond indenture is a contract that spells out the provisions of the contract between the corporation and bondholder.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Bond indenture. A contract that spells out the provisions of the contract between the corporation and bondholder.

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Related coursework

Trustee is an organization (usually a bank) or person who monitors a bond indenture for the protection of bondholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Trustee. Organization (usually a bank) or person who monitors a bond indenture for the protection of bondholders.

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Related coursework

Secured bond is bond issued by a corporation that pledges specific assets as security to meet the terms of the bond agreement.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Secured bond. Bond issued by a corporation that pledges specific assets as security to meet the terms of the bond agreement.

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Related coursework

Debenture bond is bond that is unsecured and is issued only on the general credit of a corporation.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Debenture bond. Bond that is unsecured and is issued only on the general credit of a corporation.

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Related coursework

Serial bond is bond issued in a series, each one of which has a different maturity date and thus comes due at a different time.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Serial bond. Bond issued in a series, each one of which has a different maturity date and thus comes due at a different time.

Related concepts

Related coursework

Registered bond is bondholders of record are registered with the corporation, and interest checks are sent directly to them.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Registered bond. Bondholders of record are registered with the corporation, and interest checks are sent directly to them.

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Related coursework

Callable bond is bond with a provision that it can be called in by the issuing corporation after a certain date.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Callable bond. Bond with a provision that it can be called in by the issuing corporation after a certain date.

Related concepts

Related coursework

Convertible bond is bondholders have the option of converting bonds into stock at a specified exchange rate.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Convertible bond. Bondholders have the option of converting bonds into stock at a specified exchange rate.

Related concepts

Related coursework

Effective rate is the real or actual rate of interest to the borrowing corporation.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Effective rate. The real or actual rate of interest to the borrowing corporation.

Related concepts

Related coursework

Carrying value (book value) is face value of bond less bond discount or plus bond premium.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Carrying value (book value). Face value of bond less bond discount or plus bond premium.

Related concepts

Related coursework

Discount on Bonds Payable is the account used when bonds are issued below face value; indicates market rate of interest is higher than contract rate. This account is a contra-liability account.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Discount on Bonds Payable. Account used when bonds are issued below face value; indicates market rate of interest is higher than contract rate. This account is a contra-liability account.

Related concepts

Related coursework

Amortization of discount on Bonds Payable (amortization of premium on Bonds Payable) is writing off the bond premium or discount as a decrease or increase to interest expense for each interest period.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Amortization of discount on Bonds Payable (amortization of premium on Bonds Payable). Writing off the bond premium or discount as a decrease or increase to interest expense for each interest period.

Related concepts

Related coursework

Straight-line method is a method recognizing equal amounts of interest expense for each period when amortizing a bond discount or premium.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Straight-line method. A method recognizing equal amounts of interest expense for each period when amortizing a bond discount or premium.

Related concepts

Related coursework

Premium on Bonds Payable is the account used when bonds are issued above face value; it indicates that market interest rate is below contract rate. This account is a liability account.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Premium on Bonds Payable. Account used when bonds are issued above face value; it indicates that market interest rate is below contract rate. This account is a liability account.

Related concepts

Related coursework

Interest method of amortization. The method that amortizes the premium or discount to record interest expense, being equal to the carrying value of the bond times the market rate times the time period. The interest expense is a constant percentage of the carrying value. The discount or premium to be amortized is the difference between the interest to be recorded and the interest paid to bondholders.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Interest method of amortization. This method amortizes the premium or discount to record interest expense, being equal to the carrying value of the bond times the market rate times the time period. The interest expense is a constant percentage of the carrying value. The discount or premium to be amortized is the difference between the interest to be recorded and the interest paid to bondholders.

Related concepts

Related coursework

Sinking fund is a fund that accumulates cash to pay off bonds when they are retired.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Sinking fund. A fund that accumulates cash to pay off bonds when they are retired.

Related concepts

Related coursework

Bond Sinking Fund Interest Earned is other revenue account used to record earnings on sinking fund balance.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Bond Sinking Fund Interest Earned. Other revenue account used to record earnings on sinking fund balance.

Related concepts

Related coursework

Fair Labor Standards Act (Federal Wage and Hour Law) is a United States law that the majority of American employers must follow that contains rules stating the minimum hourly rate of pay and the maximum number of hours a worker will work before being paid time and a half for overtime hours worked. This law also has other rules and regulations that employers must follow for payroll purposes.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Fair Labor Standards Act (Federal Wage and Hour Law). A United States law that the majority of American employers must follow that contains rules stating the minimum hourly rate of pay and the maximum number of hours a worker will work before being paid time and a half for overtime hours worked. This law also has other rules and regulations that employers must follow for payroll purposes.

Related concepts

Related coursework

Interstate commerce is a test that is applied to determine whether an employer must follow the rules of the Fair Labor Standards Act. If an employer communicates or does business with another business in some other state, it is usually considered to be involved in interstate commerce.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Interstate commerce. A test that is applied to determine whether an employer must follow the rules of the Fair Labor Standards Act. If an employer communicates or does business with another business in some other state, it is usually considered to be involved in interstate commerce.

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Form W-4 (Employee's Withholding Allowance Certificate) is a form filled out by employees and used by employers to supply needed information about the number of allowances claimed, marital status, and so forth. The form is used for payroll purposes to determine federal income tax withholding from an employee's paycheck.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form W-4 (Employee's Withholding Allowance Certificate). A form filled out by employees and used by employers to supply needed information about the number of allowances claimed, marital status, and so forth. The form is used for payroll purposes to determine federal income tax withholding from an employee's paycheck.

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Federal income tax withholding (FIT withholding) is amount of federal income tax withheld by the employer from the employee's gross pay; the amount withheld is determined by the employee's gross pay, the pay period, the number of allowances claimed by the employee on the W-4 form, and the marital status indicated on the W-4 form.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Federal income tax withholding (FIT withholding). Amount of federal income tax withheld by the employer from the employee's gross pay; the amount withheld is determined by the employee's gross pay, the pay period, the number of allowances claimed by the employee on the W-4 form, and the marital status indicated on the W-4 form.

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Allowances (also known as exemptions) are certain dollar amounts of a person's income tax that will be considered nontaxable for income tax withholding purposes.

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Allowances (also known as exemptions). Certain dollar amounts of a person's income tax that will be considered nontaxable for income tax withholding purposes.

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Wage bracket table is one of various charts in IRS Circular E that provide information about deductions for federal income tax based on earnings and data supplied on the W-4 form.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Wage bracket table. One of various charts in IRS Circular E that provide information about deductions for federal income tax based on earnings and data supplied on the W-4 form.

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IRS Circular E (Circular E) is an IRS tax publication of payroll procedures, including tax tables.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

IRS Circular E (Circular E). An IRS tax publication of payroll procedures, including tax tables.

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State income tax withholding is amount of state income tax withheld by the employer from the employee's gross pay.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

State income tax withholding. Amount of state income tax withheld by the employer from the employee's gross pay.

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FICA (Federal Insurance Contributions Act) is part of the Social Security Act of 1935, this law taxes both the employer and employee up to a certain maximum rate and wage base for OASDI tax purposes. It also taxes both the employer and employee for Medicare purposes, but this tax has no wage base maximum.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

FICA (Federal Insurance Contributions Act). Part of the Social Security Act of 1935, this law taxes both the employer and employee up to a certain maximum rate and wage base for OASDI tax purposes. It also taxes both the employer and employee for Medicare purposes, but this tax has no wage base maximum.

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Taxable earnings is a numerical value that shows amount of earnings subject to a tax. The tax itself is not shown.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Taxable earnings. A numerical value that shows amount of earnings subject to a tax. The tax itself is not shown.

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Medical insurance is health care insurance for which premiums may be paid through a deduction from an employee's paycheck.

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Medical insurance. Health care insurance for which premiums may be paid through a deduction from an employee's paycheck.

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Federal Unemployment Tax Act (FUTA) is a tax paid by employers to the federal government. The current rate is 0.6% on the first $7,000 of earnings of each employee after the normal FUTA tax credit is applied.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Federal Unemployment Tax Act (FUTA). A tax paid by employers to the federal government. The current rate is 0.6% on the first $7,000 of earnings of each employee after the normal FUTA tax credit is applied.

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State Unemployment Tax Act (SUTA) is a tax usually paid only by employers to the state for employee unemployment insurance.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

State Unemployment Tax Act (SUTA). A tax usually paid only by employers to the state for employee unemployment insurance.

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Workers' compensation insurance is insurance purchased by most employers to protect their employees against losses due to injury or death while on the job.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Workers' compensation insurance. Insurance purchased by most employers to protect their employees against losses due to injury or death while on the job.

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Payroll tax expense is the cost to employers that includes the total of the employer's FICA OASDI, FICA Medicare, FUTA, and SUTA taxes. Remember, the employer matches the employee contributions for OASDI and Medicare.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Payroll tax expense. The cost to employers that includes the total of the employer's FICA OASDI, FICA Medicare, FUTA, and SUTA taxes. Remember, the employer matches the employee contributions for OASDI and Medicare.

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Employer identification number (EIN) is a number assigned by the IRS that is used by an employer when recording and paying payroll and income taxes.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Employer identification number (EIN). A number assigned by the IRS that is used by an employer when recording and paying payroll and income taxes.

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Form SS-4 is the form filled out by an employer to get an EIN. The form is sent to the IRS, which assigns the number to the business.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form SS-4. The form filled out by an employer to get an EIN. The form is sent to the IRS, which assigns the number to the business.

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Form 941 tax is another term used to describe FIT, OASDI, and Medicare. This name comes from the form used to report these taxes.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form 941 tax. Another term used to describe FIT, OASDI, and Medicare. This name comes from the form used to report these taxes.

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Look-back period is a period of time used to determine whether a business should make its Form 941 tax deposits on a monthly or semiweekly basis. The IRS defines this period as July 1 through June 30 of the year prior to the year in which Form 941 tax deposits will be made.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Look-back period. A period of time used to determine whether a business should make its Form 941 tax deposits on a monthly or semiweekly basis. The IRS defines this period as July 1 through June 30 of the year prior to the year in which Form 941 tax deposits will be made.

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Monthly depositor is a business classified as a monthly depositor will make its payroll tax deposits only once each month for the amount of Form 941 taxes due from the prior month.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Monthly depositor. A business classified as a monthly depositor will make its payroll tax deposits only once each month for the amount of Form 941 taxes due from the prior month.

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Semiweekly depositor is a business classified as a semiweekly depositor may have to make its payroll tax deposits up to twice in one week, depending on when payroll is paid.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Semiweekly depositor. A business classified as a semiweekly depositor may have to make its payroll tax deposits up to twice in one week, depending on when payroll is paid.

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Form 941 (Employer's Quarterly Federal Tax Return) is a tax report that a business will complete after the end of each calendar quarter indicating the total FICA (OASDI and Medicare) taxes owed plus the amount of FIT withheld from employees' pay for the quarter. If federal tax deposits have been made correctly and on time, the total amount deposited should equal the amount due on Form 941. Any difference results in a payment due or a refund.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form 941 (Employer's Quarterly Federal Tax Return). A tax report that a business will complete after the end of each calendar quarter indicating the total FICA (OASDI and Medicare) taxes owed plus the amount of FIT withheld from employees' pay for the quarter. If federal tax deposits have been made correctly and on time, the total amount deposited should equal the amount due on Form 941. Any difference results in a payment due or a refund.

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Form 940 (Employer's Annual Federal Unemployment Tax Return) is the form that is used by employers at the end of the calendar year to report the amount of unemployment tax due for the year. If more than $500 is cumulatively owed at the end of a quarter, it should be paid one month after the end of that quarter. Normally, the report is due January 31 after the calendar year, or February 10 if an employer has already made all deposits.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form 940 (Employer's Annual Federal Unemployment Tax Return). This form is used by employers at the end of the calendar year to report the amount of unemployment tax due for the year. If more than $500 is cumulatively owed at the end of a quarter, it should be paid one month after the end of that quarter. Normally, the report is due January 31 after the calendar year, or February 10 if an employer has already made all deposits.

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Form W-2 (Wage and Tax Statement) is a form completed by the employer at the end of the calendar year to provide a summary of gross earnings and deductions to each employee. At least three copies go to the employee, one copy to the IRS, one copy to any state where employee income taxes have been withheld, one copy to the Social Security Administration, and one copy into the records of the business.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form W-2 (Wage and Tax Statement). A form completed by the employer at the end of the calendar year to provide a summary of gross earnings and deductions to each employee. At least three copies go to the employee, one copy to the IRS, one copy to any state where employee income taxes have been withheld, one copy to the Social Security Administration, and one copy into the records of the business.

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Form W-3 (Transmittal of Wage and Tax Statements) is a form completed by the employer to verify the number of W-2s and amounts withheld as shown on them. This form is sent to the Social Security Administration data processing center along with copies of each employee's W-2 forms.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Form W-3 (Transmittal of Wage and Tax Statements). A form completed by the employer to verify the number of W-2s and amounts withheld as shown on them. This form is sent to the Social Security Administration data processing center along with copies of each employee's W-2 forms.

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Modified Accelerated Cost Recovery System (MACRS) is a system for businesses to calculate depreciation for tax purposes based on the Tax Laws of 1986, 1989, and 2010; also known as the General Depreciation System (GDS).


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Modified Accelerated Cost Recovery System (MACRS). A system for businesses to calculate depreciation for tax purposes based on the Tax Laws of 1986, 1989, and 2010; also known as the General Depreciation System (GDS).

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Uniform Partnership Act is laws enacted in most states that govern how a partnership is formed, operated, and liquidated.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Uniform Partnership Act. Laws enacted in most states that govern how a partnership is formed, operated, and liquidated.

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Partnership is the association of two or more persons who act as co-owners of a business.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Partnership. The association of two or more persons who act as co-owners of a business.

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Articles of partnership. The written contract that spells out the details of the agreement among the partners.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Articles of partnership. The written contract that spells out the details of the agreement among the partners.

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Limited life is a requirement that a partnership is dissolved by admission, withdrawal, or death of a partner. Although the partnership is dissolved, the operations of the business can continue if a new partnership is formed.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Limited life. Partnership is dissolved by admission, withdrawal, or death of a partner. Although the partnership is dissolved, the operations of the business can continue if a new partnership is formed.

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Mutual agency is act of a single partner is binding on all members of the partnership.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Mutual agency. Act of a single partner is binding on all members of the partnership.

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General partner is a partner who has unlimited liability.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

General partner. A partner who has unlimited liability.

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Limited partner is the partner's liability is limited to the amount of investment in the partnership.

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Limited partner. The partner's liability is limited to the amount of investment in the partnership.

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Co-ownership of property is each partner owns a share of the assets.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Co-ownership of property. Each partner owns a share of the assets.

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Salary allowance is a mechanism for dividing earnings of a partnership based on personal services provided by the partners (not an expense).


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Salary allowance. A mechanism for dividing earnings of a partnership based on personal services provided by the partners (not an expense).

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Interest allowance is a mechanism for dividing earnings of a partnership based on a percentage of capital balances of the partners (not an expense).


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Interest allowance. A mechanism for dividing earnings of a partnership based on a percentage of capital balances of the partners (not an expense).

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Profit and loss ratio is an agreed-upon ratio used to divide earnings or losses of a partnership.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Profit and loss ratio. An agreed-upon ratio used to divide earnings or losses of a partnership.

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Statement of partners' equity is a financial statement that reveals each partner's ownership percentage of the firm's capital. The ending figure for the firm's capital is then placed on the balance sheet.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Statement of partners' equity. A financial statement that reveals each partner's ownership percentage of the firm's capital. The ending figure for the firm's capital is then placed on the balance sheet.

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Purchase of an equity interest is transfer of ownership between an existing partner and a new partner.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Purchase of an equity interest. Transfer of ownership between an existing partner and a new partner.

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Bonus is when a new partner is admitted, he or she may pay more or less than equity interest. If the new partner pays more, the old partners share a bonus in the profit and loss ratio. Of course, the opposite could result, and the new partner could receive a bonus if he or she invests less than equity interest.

Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Bonus. When a new partner is admitted, he or she may pay more or less than equity interest. If the new partner pays more, the old partners share a bonus in the profit and loss ratio. Of course, the opposite could result, and the new partner could receive a bonus if he or she invests less than equity interest.

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