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Financial Terms | |
ABC |
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Definition of ABCABCsee activity-based costing
Related Terms:ABC inventory classificationA method for dividing inventory into classifications, ABC TestA test used to determine the status of an employee under a state unemployment activity based costing (ABC)A relatively new method advocated for the activity-based costing (ABC)a process using multiple cost drivers to predict and allocate costs to products and services; Activity-based costing (ABC)A cost allocation system that compiles costs and assigns attribute-based costing (ABC II)an extension of activitybased costing using cost-benefit analysis (based on increased customer utility) to choose the product attribute Acid-test ratioAlso called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid ![]() ACID-TEST RATIOA ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula: Acid-test RatioSee quick ratio acid test ratio (also called the quick ratio)The sum of cash, accounts receivable, and short-term marketable Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average Average inventoryThe beginning inventory for a period, plus the amount at the end of Best-interests-of-creditors testThe requirement that a claim holder voting against a plan of reorganization Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. Book inventoryThe amount of money invested in inventory, as per a company’s ![]() Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Distribution inventoryinventory intended for shipment to customers, usually dollar days (of inventory)a measurement of the value of inventory for the time that inventory is held Ending inventoryThe dollar value or unit total of goods on hand at the end of an Fair-and-equitable testA set of requirements for a plan of reorganization to be approved by the bankruptcy court. Finished goods inventoryGoods that have been completed by the manufacturing Finished goods inventoryCompleted inventory items ready for shipment to First-In, First-Out (FIFO) Inventory MethodThe inventory cost-flow assumption that Fluctuation inventoryExcess inventory kept on hand to provide a buffer against functional classificationa separation of costs into groups based on the similar reason for their incurrence; it includes Hedge inventoryExcess inventories kept on hand as a buffer against contingent ![]() In-transit inventoryinventory currently situated between its shipment and delivery Inactive inventoryParts with no recent prior or forecasted usage. Incontestable ClauseThis clause in regular life insurance policy provides for voiding the contract of insurance for up to two years from the date of issue of the coverage if the life insured has failed to disclose important information or if there has been a misrepresentation of a material fact which would have prevented the coverage from being issued in the first place. After the end of two years from issue, a misrepresentation of smoking habits or age can still void or change the policy. Interest coverage testA debt limitation that prohibits the issuance of additional long-term debt if the issuer's IntestateThis means dying without a will, in which case the provincial laws of the province in which the death occurred apply to the manner in which assets will be distributed. In other words, if you don't write your own will, the government will do it for you after your death and it may not be as you would have wished. InventoryFor companies: Raw materials, items available for sale or in the process of being made ready for InventoryGoods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods. InventoryThe cost of the goods that a company has available for resale. InventoryGoods that a firm stores in anticipation of its later sale or use as an input. InventoryThe cost of unsold goods that are held for sale in the ordinary course of business or InventoryThose items included categorized as either raw materials, work-inprocess, Inventory adjustmentA transaction used to adjust the book balance of an inventory Inventory DaysThe number of days it would take to sell the ending balance in inventory at the Inventory diversionThe redirection of parts or finished goods away from their intended Inventory issueA transaction used to record the reduction in inventory from a location, Inventory loanA secured short-term loan to purchase inventory. The three basic forms are a blanket Inventory receiptThe arrival of an inventory delivery from a supplier or other Inventory returnsinventory returned from a customer for any reason. This receipt inventory shrinkageA term describing the loss of products from inventory Inventory ShrinkageA shortfall between inventory based on actual physical counts and inventory Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory INVENTORY TURNOVERThe number of times a company sold out and replaced its average stock of goods in a year. The formula is: Inventory turnoverThe number of times per year that an entire inventory or a Inventory TurnoverRatio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period. inventory turnover ratioThe cost-of-goods-sold expense for a given Inventory Turnover RatioProvides a measure of how often a company's inventory is sold or inventory write-downRefers to making an entry, usually at the close of a Just-in-time inventory systemsSystems that schedule materials/inventory to arrive exactly as they are Last-In, First-Out (LIFO) Inventory MethodThe inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory Maximum inventoryAn inventory item’s budgeted maximum inventory level, MERCHANDISE INVENTORYThe value of the products that a retailing or wholesaling company intends to resell for a profit. Minimum inventoryAn inventory item’s budgeted minimum inventory level. Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. Net inventoryThe current inventory balance, less allocated or reserved items. Obsolete inventoryParts not used in any current end product. Periodic inventoryA physical inventory count taken on a repetitive basis. Periodic inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold only at the end of the period. Perpetual inventoryA system that continually tracks all additions to and deletions Perpetual inventoryA manual or automated inventory tracking system in which Perpetual inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made. Physical inventoryA manual count of the on-hand inventory. Proxy contestA battle for the control of a firm in which the dissident group seeks, from the firm's other proxy contestTakeover attempt in which outsiders compete with management for shareholders’ votes. Also called proxy fight. Raw materials inventoryThe total cost of all component parts currently in stock that Reconciling inventoryThe process of comparing book to actual inventory balances, Seasonal inventoryVery high inventory levels built up in anticipation of large Surplus inventoryParts for which the on-hand quantity exceeds forecasted Tick-test rulesSEC-imposed restrictions on when a short sale may be executed, intended to prevent investors vendor-managed inventorya streamlined system of inventory Vendor-managed inventoryThe direct management and ownership of selected Work-in-process inventoryinventory that has been partially converted through the Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |