Expenses incurred during the year but for which payment has not been made and will have to be made next year are called unpaid expenses, e.g., rent, rates, tuxes, electricity charges, audit fee, salaries, etc. The auditor should examine vouchers, receipts, invoices, demand notes, etc., to ascertain whether expenses ought to have been debited to the current year’s profit and loss account and whether any payment has been made.
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- Direct materials
Raw materials that can be physically and directly associated with the finished product during the manufacturing process are called direct materials.
- Cost behavior analysis
Cost behavior analysis is the study of how specific costs respond to changes in the level of business activity. As you might expect, some costs change, and others remain the same.
- Face value
The face value is the amount of principal the issuing company must pay at eh maturity date.
- Standard predetermined overhead rate
Standard predetermined overhead rate is an overhead rate determined by dividing budgeted overhead costs by an expected standard activity index.
- Post-closing trial balance
The post-closing trial balance is a list of permanent accounts and their balances after a company has journalized and posted of closing entries.
- Retailers & Wholesalers
Merchandising companies that purchase and sell directly to consumers are called retailers.Merchandising companies that sell to retailers are known as wholesalers.
Bonds are a form of interest-bearing notes payable issued by corporations, universities, and governmental entities.