acc 300 terms

Securitization

sale of high quality A/R’s or notes to a factor or other vendor for sale as investment vehicles

Net realizable value

expected cash amount to be received from conversion or sale of some asset; selling price less reasonable disposal costs

Lifo reserve

cumulative difference in the amount reported for ending inventory (under some other method) necessary to reduce inventory to lifo value.

Capitalize

to record in an account; for an asset, this implies future benefit beyond the current period

Expense

to write off an asset; implies use of the asset

Vest

owned by the employee without further service to the enterprise

Fair Value Exchange rule

Record a transaction using the value of what is given up, or what is received, whichever is more readily determined.

Tax effect

The change in taxes due to the existence of a given item. It is equal to the item multiplied by the appropriate tax rate.

Liability

Unavoidable obligation resulting from a past transaction; settlement will require the use of cash or other assets