Unearned Revenue

Unearned revenue is a current liability account that represents money collected from customers before goods have been delivered or services have been performed.  When a […]

Treasury stock represents stock shares that a company had issued and then later repurchased.  Treasury stock reduces the number of shares a company has outstanding.   […]

A subsidiary company is a company that is majority owned by another entity.   The entity which owns the subsidiary company is called the parent company.   […]

Straight-line depreciation is a method for calculating yearly depreciation expense for a long-lived fixed asset where an equal amount of depreciation is recognized each year […]

The specific identification method is a method of accounting for inventory and cost of sales where the exact item is matched to the sale.  The […]

Solvency refers to a company’s ability to satisfy its financial liabilities with existing resources.  A company is considered solvent when its assets and cash flows […]

The Securities and Exchange Commission (SEC) is a federal agency with regulatory jurisdiction over the issuance and trading of financial securities.  After the 1929 stock […]

Retained earnings represent the cumulative net profits a company has retained in the business.   For any given period, retained earnings equal the period’s net income […]

The Sarbanes-Oxley Act is legislation passed in July of 2002 which addressed flaws in the governance of U.S. publicly traded corporations.  The legislation is named […]