Acid test ratio
General ledger
a book that summarizes all journal entries for an accounting period in order to arrive at a trial balance
Ledger
a collection of all accounts payable and receivable used in the business
Controllable cost
a cost in which the amount is controllable by someone in the organization
Bill of lading
a document issued by a carrier to a shipper upon acceptance of goods for shipment, representing a receipt for the goods and the contact stating the terms for carriage
Straight line method of depreciation
also a method of amortizing bond premium and discount
Accounts payable
amount owed to suppliers for goods or services purchased on credit
Corporation
an artificial person or legal entity, created by law, with the capacity of perpetual succession
Intangible asset
an asset not having apparent physical existence patents copyrights goodwill
Partnership
an association of two or more people to operate a business for profit
Useful life
an estimate of the number of years an item of plant and equipment will be used by a nursing facility
Variable cost
an operating cost that varies in direct proportion to changes in volume such as salary costs supplies
Cost center
an organizational unit whose costs are separately accumulated in the accounts
Current assets
assets that can be converted into cash within one year
Journal
book of original entry
Audit
checking and reviewing the accuracy of account records by an independent agency or person
Chart of accounts
complete listing of names of the accounts in the general ledger
Historical cost
cost of acquiring a depreciable asset
Semi variable costs
costs that are partly variable and partly fixed in behavior in response to changes in volume
Allowable costs
costs that are reimbursable by a third party payer
FICA taxes
current liability
Depreciation
decrease in value of an asset due to obsolescence
Net worth
equals assets minus liabilities
Net income
excess of revenue over related expenses during an account period
Ratio
expression of the relation of a numerical item to another
Balance sheet
financial statement summarizing assets, liabilities and net worth
Working capital
generally, the excess of current assets over current liabilities
Operating budget
includes anticipated income by source and anticipated expense by category
Revenue
income or the inflow of assets from sale of services or products
Variance analysis
managerial control technique that identifies and investigates deviations form a budget's original projections
Current liability
obligations in which payment is expected to require use of current assets, usually paid within a one year period
Tangible asset
one that has physical characteristics such as equipment land building
Assets
property that an organization owns
Acid test ratio
quick rate quick current ratio it measures the immediate solvency or debt paying ability of a company
Salvage value
scrap value the estimated amount for which a plant asset can be sold at the end of its useful life
Yield
the actual rate of return on an investment as opposed to the nominal rate of return
Marginal return
the point at which income equals expenses the break even point
Controller
the title usually given to the executive responsible for the accounting function in the organization
Activity ratio
these divide various types of assets into net operating revenue
Posting
transfer from general journal to the ledger