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Definition of Residual method
A method of allocating the purchase price for the acquisition of another firm among the
a process of service department cost allocation
A method of adjusting accounts receivable to the amount that is expected to be collected based on company experience.
The inventory cost-flow assumption that assigns the average
The proportion of unemployment benefits paid to a company’s
The proportion of total taxable wages for laid off
An arithmetic method for backing an
A method of constructing a replicating portfolio in which the manager purchases a
A contract accounting method that recognizes contract revenue
Under this currency translation method, all foreign currency balance-sheet and income
A method of cash budgeting based on detailed estimates of cash receipts and cash
A method of preparing the operating section of the Statement of Cash Flows that uses the company’s actual cash inflows and cash outflows.
a service department cost allocation approach
A format for the operating section of the cash-flow statement that reports actual cash receipts and cash disbursements from operating activities.
A method of adjusting accounts receivable to the amount that is expected to be collected by eliminating the account balances of specific nonpaying customers.
a method of computing the cost
Accounting method for an equity security in cases where the investor has sufficient
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
First in, first-out costing method (FIFO)
A process costing methodology that assigns the earliest
First-In, First-Out (FIFO) Inventory Method
The inventory cost-flow assumption that
The practice of reporting to shareholders using straight-line depreciation and
A method of accounting for petroleum exploration and development expenditures
a technique used to determine the fixed
A method of preparing the operating section of the Statement of Cash Flows that does not use the company’s actual cash inflows and cash outflows, but instead arrives at the net cash flow by taking net income and adjusting it for noncash expenses and the changes from last year in the current assets and current liabilities.
A format for the operating section of the cash-flow statement that
judgmental method (of risk adjustment)
an informal method of adjusting for risk that allows the decision maker
Last-In, First-Out (LIFO) Inventory Method
The inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory
Log-linear least-squares method
A statistical technique for fitting a curve to a set of data points. One of the
method of least squares
see least squares regression analysis
method of neglect
a method of treating spoiled units in the
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
Monetary / non-monetary method
Under this translation method, monetary items (e.g. cash, accounts
Moving average inventory method
An inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase.
net present value method
a process that uses the discounted
Net Present Value (NPV) Method
A method of ranking investment proposals. NPV is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment.
The practice of making a charge in the income account equivalent to the tax savings
A capital budgeting analysis method that calculates the amount of
A contract accounting method that recognizes contract
Accounting for an acquisition using market value for the consolidation of the two entities'
An accounting method used to combine the financial statements of
Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Related: equity claim
Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
Also called economic value added. Profit minus cost of capital employed.
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
Lost wealth of the shareholders due to divergent behavior of the managers.
Related: unsystematic risk
Usually refers to the value of a lessor's property at the time the lease expires.
The value attributed to a company to represent all future cash flows
Typically estimated based on the present value of the after-tax cash flows expected to be earned after the forecast period.
1) Parts of stock returns not explained by the explanatory variable (the market-index return). They
risk-adjusted discount rate method
a formal method of adjusting for risk in which the decision maker increases the rate used for discounting the future cash flows to compensate for increased risk
Simple compound growth method
A method of calculating the growth rate by relating the terminal value to
an iterative (sequential) algorithm used to solve multivariable, multiconstraint linear programming problems
a high-performance, data-driven approach to analyzing and solving the root causes of business problems
A method of cash budgeting that is organized along the lines of the statement of cash flows.
a process of service department cost allocation
strict FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per equivalent unit and, in transferring units from a department, keeps the
Successful Efforts Method
A method of accounting for petroleum exploration and development
Under this currency translation method, the choice of exchange rate depends on the
weighted average method (of process costing)
the method of cost assignment that computes an average cost per
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