What are realized gains or losses? The difference between expenses on a current cost basis and on a historical cost basis, which represents the holding gains or losses the firm has realized through sales or use in the current period.
What are the research and development costs? Those expenditures incurred in discovering, planning, designing, and implementing a new product or process are called research and development costs.
What is Retail Method? A method of estimating inventory by which the inventory is taken at retail prices and then converted to cost is called the retail method.
What is a Receivable Turnover Ratio? A ratio determined by dividing credit sales by the average account receivable for the period. Formula Receivable Turnover = Credit sales / Average Account Receivable
What is Return on Assets Ratio? – Definition The return on assets is the ratio determined by dividing the net income by the average total assets. Formula Return on Assets = Net Income / Average Total Assets
What is meant by Reversing Entries? Reversing entries are the entries made on the first day of a new accounting period that reverse certain adjusting entries to allow the routine recording of certain entries.
What is meant by Residual Value? Residual value or salvage value is an estimate of an asset’s worth at the end of its useful life.
What is Realization Principle? Realization Principle is the principle accountants follow to determine when revenue should be recognized.
What is meant by Accounting term Real Accounts? Real Accounts are the balance sheet accounts (including retained earnings), the balances of which extend beyond the accounting period.
What is meant by the term revenues? Revenues are the price of goods sold or services rendered by a firm to others in exchange for cash or other assets.
What is the retained earnings statement? Retained Earnings statement is a financial statement which details the changing in the retained earnings account for a certain period.
What is meant by the term reliability? Reliability term meaning that the accounting information is unbiased, accurate, and verifiable.
What is meant by term Relevance? Relevance is a qualitative characteristic requiring that accounting information be impactful in a user’s decision.