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Financial Terms | |
Contribution Principle |
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Definition of Contribution PrincipleContribution PrincipleThis is the principle which specifies the factors that must be taken into account when calculating dividends. At Canada Life, the key factors are: interest earnings, mortality, and operating expense.
Related Terms:Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures ContributionAlso the difference between the selling price and variable costs, which can be expressed either per Contribution marginThe difference between variable revenue and variable cost. contribution marginAn intermediate measure of profit equal to sales revenue contribution marginthe difference between selling price and Contribution marginThe margin that results when variable production costs are subtracted contribution margin ratiothe proportion of each revenue dollar remaining after variable costs have been covered; ![]() Contribution RateThe percentage tax charged by a state to an employer to Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Defined contribution planA pension plan in which the sponsor is responsible only for making specified Defined Contribution PlanA qualified retirement plan under which the employer Equity contribution agreementAn agreement to contribute equity to a project under certain specified Federal Insurance Contributions Act of 1935 (FICA)A federal Act authorizing the government to collect Social Security and Medicare payroll taxes. Generally accepted accounting principlesThe rules that accountants follow when processing accounting transactions and creating financial reports. The rules are primarily generally accepted accounting principles (GAAP)This important term generally accepted accounting principles (GAAP)Procedures for preparing financial statements. ![]() Generally Accepted Accounting Principles (GAAP)A common set of standards and procedures Generally Accepted Accounting Principles (GAAP)GAAP is the term used to describe the underlying rules basis on which financial statements are normally prepared. This is codified in the Handbook of The Canadian Institute of Chartered Accountants. Insurance principleThe law of averages. The average outcome for many independent trials of an experiment Matching principleThe process of linking recognized revenue to any associated Matching PrincipleAn accounting principle that ties expense recognition to revenue recognition, Pareto principlea rule which states that the greatest effects product contribution marginthe difference between selling price and variable cost of goods sold Self-Employment Contributions Act (SECA)A federal Act requiring self-employed business owners to pay the same total tax rates for Social Security and Stand-alone principleInvestment principle that states a firm should accept or reject a project by comparing it Systematic risk principleOnly the systematic portion of risk matters in large, well-diversified portfolios. Throughput contributionSales revenue less the cost of materials. ![]() total contribution marginsee contribution margin profitThe general term profit is not precisely defined; it may refer to net Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |