Frictional Unemployment

What is Frictional Unemployment? Definition: Frictional unemployment exists when individuals are out of work but are likely to be re-employed soon. It is usually a period when a job seeker is temporarily unemployed as he or she is in the process of looking for a suitable position. What does Frictional Unemployment...

Full Disclosure Principle

What is the Full Disclosure Principle? Definition: It is necessary to implement the full disclosure principle when preparing a company’s financial statements. According to this principle, a company must disclose all material facts so that investors, lenders, regulatory authorities, and other users of the financial statements, can gain an accurate understanding...

General Journal

What is a General Journal? Definition: A general journal is a record of accounting entries. When a business carries out a financial transaction, it is necessary to make a journal entry. This entry may be made either in the general journal or in a special journal.Special journals are usually maintained for...

Gift Tax

What is Gift Tax? Definition: Gift tax is a tax levied by the federal government on any property or assets given to another person without receiving full value in exchange. What does Gift Tax Mean? If an individual gives some money to another person without expecting it to be paid...

Going Concern Assumption

What is the Going Concern Assumption? Definition: A company’s financial statements are prepared based on the going concern assumption. This implies that the company will continue to remain in business for the foreseeable future. External parties, especially lenders and suppliers, are willing to deal with a company because they assume that...

Government Expenditures

What are Government Expenditures? Definition: Government expenditures account for a significant portion of every country’s gross domestic product. They include:The amount that the government spends on the purchase of goods and services andThe sums spent on expenditures that do not involve a good or a service. These are termed transfer payments...

Gross Wages

What are Gross Wages? Definition: Gross wages are the total amount paid by an employer to an employee. It is the amount that is earned before any deductions are made. What do Gross Wages mean? The gross wages figure includes hourly wages, salaries, bonus, commission, and overtime. Every amount that an...

Horizontal Merger

What is a Horizontal Merger? Definition: A horizontal merger involves the coming together of two companies that manufacture or deal with similar products. This type of merger usually gives the new company the ability to offer its customers a wider range of products. A horizontal merger may also result in various...

Implicit Cost

What is an Implicit Cost? Definition: An implicit cost is a type of opportunity cost for utilizing a company’s assets. It cannot be easily measured and does not result in any payment being made. Instead, it is a notional expense that results in a loss of possible income. What does Implicit...