An accounting method refers to the rules a company follows in reporting revenues and expenses, which are crucial for computing income and determining taxable income.
Accounts Payable (AP) is a short-term debt account, representing a company's obligation to pay off a short-term debt to its creditors or suppliers.
Balancing allowance is the allowance available on disposal of an asset when the proceeds are less than the written-down value for tax purposes. It compensates for the loss in value of the asset beyond its depreciation.
Bills payable refers to the amounts a company owes to its creditors for the purchase of goods or services that were bought on credit.
A Book-Keeper is a person responsible for recording the financial transactions and maintaining the books of account for a business. This role is vital for the accurate and efficient tracking of all financial events in an organization.
An account used to record commissions paid by an organization to agents and others. This account is essential for tracking costs attributed to sales commissions within a company's financial statements.
EOM Dating refers to a specific arrangement in payment terms where all purchases made through a specific day of one month are payable within a set period after the end of the following month.
Excess (accelerated) depreciation refers to the accumulated difference between accelerated depreciation claimed for tax purposes and what straight-line depreciation would have been. Generally, excess accelerated depreciation is recaptured as ordinary income upon a sale, instead of receiving more favorable capital gains treatment.
A fiscal tax year is a 12-month period used by businesses and organizations for accounting and taxation purposes. Unlike the calendar year, it does not necessarily end on December 31.
A fiscal year is a 12-month period used for calculating annual financial statements in businesses and other organizations. The start and end dates of a fiscal year can vary between countries and organizations.
Impaired Capital refers to the situation where a company's total capital is less than the stated or par value of its capital stock, indicating financial difficulties or ongoing losses.
Incremental analysis, also known as differential analysis, is a decision-making tool used in business and accounting to assess the financial implications of different choices by focusing on relevant revenues and costs.
Nonoperating expenses (or revenues) refer to the financial transactions that are incidental to a business's core operations. They typically arise from activities that are secondary to the main business functions.
Owner's equity represents the portion of an organization's value held by its owners, encompassing capital investments and retained earnings, minus liabilities such as dividends and other financial obligations.
Receivables represent the amount of money owed to a business by its customers for goods or services delivered or used but not yet paid for. These are current assets recorded on the balance sheet, reflecting the business's right to receive payment.
SG&A expenses are essential for the daily operations of a business but do not include production costs. These expenses are tracked on a company's profit and loss statement and cover a variety of areas such as sales salaries, advertising, office expenses, and more.
The sold ledger, often referred to as the debtors' ledger, captures all transactions involving sales made on credit. It helps businesses keep track of amounts owed by customers and ensures proper management of accounts receivable.
The specific charge-off method allows for the deduction of bad debt at the time a specific receivable is determined to be uncollectible, following the exhaustion of all possible collection methods. Accrual basis taxpayers are required to use this method for tax purposes, as they can no longer accrue reserves for bad debts.
An uncollectible account is a customer account that cannot be collected due to the customer's unwillingness or inability to pay. Such accounts may be written off as worthless after several collection attempts, although further collection efforts may continue.
