What is Reconciling Account? Reconciling an account is an accounting process that is used to ensure that the transactions in a company’s financial records are consistent with independent third party reports. Reconciliation confirms that the recorded sum leaving an account corresponds to the amount that’s been spent and that the two accounts are balanced at…
What are Appraisal-based Indices? Appraisal-based indices are the most common form of rating the performance of the commercial real estate industry. The appraisal-based method can also be referred to as a valuation-based method. Unlike transaction-based indices, the data is readily available from recent valuations of properties. Although the data is not centrally placed (based on…
What is Contribution Margin After Marketing (CMAM)? Contribution margin after marketing (CMAM) refers to the amount of money generated for each unit sold after deducting the variable costs and marketing expenses incurred by a company. Contribution margin after marketing is similar to contribution margin, but the company must account for the marketing costs incurred when…
What is Rent Expense? Rent expense refers to the total cost of using rental property for each reporting period. It is typically among the largest expenses that companies report. Only two expenses are usually larger than rental expense: cost of goods sold (COGS) and compensation (wages) expense. Rent expense is the payment made to a…
What is Ex-Post? Ex-post is a Latin word that means “after the event,” and it is the opposite of the Latin word “ex-ante,” which means “before the event.” It refers to the actual returns earned by a security or investment. Usually, most investors forecast the expected returns of a security based on the historical returns…
What is Ex-Ante? Ex-ante is a Latin word that means “before the event.” The term is commonly used in financial markets to refer to the prediction of events such as economic and financial parameters. For example, ex-ante applies when predicting the returns of a security. Analysts use fundamental factors to determine the expected returns and…
What is Insurance Expense? Insurance expense is the amount that a company pays to get an insurance contract and any additional premium payments. The payment made by the company is listed as an expense for the accounting period. If the insurance is used to cover production and operation, then the insurance expense can be listed…
What is Net Book Value? Net book value (NBV) refers to the historical value of a company’s assets or how the assets are recorded by the accountant. NBV is calculated using the asset’s original cost – how much it cost to acquire the asset – with the depreciation, depletion, or amortization of the asset being…
What is Allocative Efficiency? Allocative efficiency is the level of output where marginal cost is as close as possible to the marginal benefits. It means that the price of the product or service is close to the marginal benefit that one gets from using that product or service. Allocative efficiency occurs when market data is…
What was Black Monday? Black Monday—as it is referenced today—took place on October 19, 1987. On this day, stock markets around the world crashed, though the event didn’t happen all at once. Black Monday saw the biggest one-day percentage drop in U.S. stock market history. The Dow Jones Industrial Average (DJIA) dropped by slightly more than…
