ASSETS: Accounting Definitions
ASSETS 4 ACCOUNT
1. Asset 2. Balance sheet 3. Real Account 4. Debit
Billings on CIP
Amounts billed for Long term construction, reduces CIP on the Balance sheet
Accounts receivable
Amounts owed by customers for sales on credit, generally due in 30-60 days without interest
Available for sale
Any debt or equity security that's not trading in 3 months
Other Receivables
Can include any amounts owed by other than customers, such as suppliers, employees, IRS, etc.
Interest Receivable
Cash accrued or declared & due from investments in other company stock, bond or lending
Work in Process
Direct material, direct labor & manufacturing overhead costs attached to product being manufactured
Allowance for Doubtful Accounts
Estimated amount of uncollectible Accounts Receivable
CURRENT ASSETS
Expected to be converted to cash or consumed within 1 year of Balance Sheet date
CASH
Includes checks, money orders, and amounts in checking & savings accounts & petty cash
Construction in Process (CIP)
Inventory account for Long term construction, including costs & any gross profit to date
Securities - Trading
Investments in stock & bonds intended to be sold in less than 3 months
GAAP Framework
Is investor decision usefulness: Providing useful information so external users can make informed decisions
Merchandise
Products for sale to customers
Purchase Discounts
Reductions of standard inventory cost for early payment to supplier or other reason (Reduced Inventory)
Prepaid Expenses
Resources to be consumed through doing business EX: Supplies, prepaid insurance or rent
ASSETS
Resources with expected future benefits. General Balance Sheet valuation is historical cost.
Cash Equivalent
Safe liquid investment with original maturity of 3 months or less
Purchase Returns & Allowances
Temporary account used with periodic inventory system to record inventory purchases
Finished Goods
The DM, DL, & MO costs attached to completed products that are ready for sale to customers
FASB Framework
The concept & reason upon which GAAP rules & standards are based
Raw Materials
materials bought by manufacturing company that will be used to make finished goods inventory
