Operating Changes Definition

What is meant by operating changes? Operating changes are the transactions that result from the production, purchase, and sale of the firm’s goods and services, and that affect net working capital, and ultimately retained earnings (also called income statement transactions).

Organization Costs Definition

What is meant by organization costs? Organization costs are those costs that a corporation incurs during the organization process, including such costs are filing and incorporation fees to the state, attorney’s fees, promotion fees, printing and engraving fees, and similar items.

Off-Balance Sheet Financing

What is meant by Off-Balance Sheet financing? Off-balance Sheet Financing is the fact that certain liabilities are not recorded on the balance, for example, leases that are in substance installment purchases but are not recorded as liabilities.

Operating lease definition

What is meant by the operating lease? Operating lease is a short term lease under which regular monthly payments are made by the lessee, but the lessor retains control and ownership of the property.

Operating Cycle Definition

What is meant by the accounting term “Operating Cycle”? Operating Cycle is the average time a business takes to purchase merchandise, sell the merchandise and receive cash.

Opinion Definition

What is Opinion? Opinion is a report issued by the auditor after examination of findings regarding the financial statements of a firm. Often called the accountant’s or Auditor’s report.

Opportunity Cost

Definition An opportunity cost is a cost that results from a foregone opportunity. Opportunity¬†cost is the concept used for the evaluation of alternative uses of resources. Decision makers select that alternative use of resources from which they expect the maximum net return. Opportunity cost is the net return that could be obtained¬†from the second best …

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Outsiders Equity or External Equity

Definition It means the right of outsiders on the assets of the business; it is also called external equity. The outsiders have right on the assets of the business to the extent of loan given by them only e.g. Creditors. Example If a business is started by Mr. A by introducing $500,000 and $300,000 by …

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Owner’s Equity or Internal Equity

What is Owner’s Equity? Owner’s Equity means the right of the owner on the assets of the business; it is also called internal equity. The owner has right on business to the extent of the amount invested by him or the claim of the owner against the assets of the firm is called internal equity …

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