LIFO (Last-In, First-Out)

The last-in, first-out (LIFO) method is an inventory valuation method which assumes that the most recent inventory purchases are sold first.   The LIFO method is […]

A fixed asset is a tangible economic resource which is expected to provide economic benefits to the firm beyond the greater of one year or […]

A deferral is a delay in the recognition of a revenue or expense transaction.   Deferred revenue is revenue which is not yet earned. Deferred revenue […]

Carrying value refers to the balance sheet value of an asset.   For tangible assets, the carrying value is the asset’s acquisition price less accumulated depreciation […]

The first-in, first-out (FIFO) inventory method is a method for valuing inventory which assumes that the oldest purchases are the first units sold.  The FIFO […]

The Federal Insurance Contributions Act (FICA) tax is a payroll tax which is withheld from employee wages and matched by the employer.  The FICA tax […]

The cost principle is an accounting principle which states that an asset, liability, or equity should be recorded on a company’s book at the original […]

The direct write-off method refers to the expensing of a receivable when the firm deems the receivable uncollectible.   The direct method involves two steps. First, […]

Consolidated financial statements are the combined financial statements of a company which has one or more subsidiaries.   Under U.S. GAAP, a company which has control […]