unamortized bond discount
A contra liability account containing the amount of discount on bonds payable that has not yet been amortized to interest expense.
unamortized bond premium
A liability account containing the amount of premium on bonds payable that has not yet been amortized to interest expense.
unappropriated retained earnings
The regular retained earnings. Retained earnings that have not been restricted.
uncollected funds
The amounts in a company's bank account that are not yet accessible because the checks deposited into the account have not yet cleared the bank on which they were drawn.
uncollectible accounts expense
See Bad Debt Expense.
underapplied manufacturing overhead
The situation where a company has assigned less manufacturing overhead than the amount budgeted.
underlying principles/guidelines
The basic general rules upon which more detailed accounting standards are built. To learn more, see Explanation of Accounting Principles.
understates
Reports too little. If an error understates the inventory and the company's net income, the amount of inventory and the amount of net income being reported are less than the correct amounts.
underwriter
In securities, a party that assists a company in issuing stock or bonds.
unearned premium revenue
A liability account that reports an insurance company's premiums received from its insured that have not yet been earned. For example, if the insurance company receives $600 on January 27 for an insured's insurance coverage for the period of February 1 through July 31, the $600 has not been earned as of January 31. The insurance company will report the $600 in its Cash account and should report $600 as a current liability in the account Unearned Premium Revenue. As the premium is earned, the insurance company will move the amount earned from the liability account to a revenue account on its income statement.
unearned revenue(s)
A liability account that reports amounts received in advance of providing goods or services. When the goods or services are provided, this account balance is decreased and a revenue account is increased. To learn more, see Explanation of Adjusting Entries for a further discussion.
unemployment compensation tax
A tax usually paid by the employer based on the first $7,000 to $12,000 (varies by state) of each employee's annual salaries and wages. The majority of the tax is paid to the state, since the state administers the unemployment payments to employees whose work hours have been eliminated or greatly reduced. A small portion of the tax is paid to the federal government.
unemployment tax expense - warehouse
Under the accrual method of accounting, the account Unemployment Tax Expense - Warehouse reports the unemployment tax expense the company has incurred for the employees in the warehouse during the period indicated in the heading of the income statement, whether or not the company has paid the unemployment taxes during this time period.
unemployment tax payable
This current liability account reports the amount a company owes the state and federal governments as of the balance sheet date for the employer's unemployent tax based on the govenments' rates and the company employees’ salaries and wages.
unfavorable variance
The amount by which actual costs exceed the standard costs or budgeted costs. Also, the amount by which actual revenues are less than the budgeted revenues.
United Way payable
This current liability account reports the amount a company owes the United Way organization as of the balance sheet date. The amount includes the withholdings' from employees' pay plus the amount owed by the employer.
units of activity method of depreciation
See units of production method of depreciation.
units of production method of depreciation
The depreciation method based on the number of units produced by the asset rather than on the passage of time. This method is also referred to as the units of activity method because depreciation is based on some activity rather than years of useful life. To learn more, see Explanation of Depreciation.
unpaid principal balance
The amount of principal owed on a loan. On the typical mortgage loan, a portion of the monthly payment is applied to interest and principal. The amount of principal that remains after the principal payment is the unpaid principal balance. The following month's interest is based upon this amount.
unqualified opinion
A "clean" auditor's report. That is, the auditor has concluded that the financial statements present fairly the results of the company's operations and its financial position according to generally accepted accounting principles.
unrealized holding gain
A gain from holding an asset and the gain has not yet been reported in the financial statements. As an example, assume that a company purchased land many years ago and continues to hold the land. The land was purchased at a cost of $20,000 but is now appraised at $300,000. Because of the cost principle and the revenue recognition principle, the land will be reported at its cost of $20,000. The holding gain of $280,000 is not realized or reported until the company sells the land.
unrealized holding loss
A loss from holding an asset and the loss has not yet been reported in the financial statements.
unsecured bond
See debenture bond.
unsecured creditor
A creditor (lender, supplier) that is owed money but does not have a lien on any of the assets of the company that owes the money (the borrower). When the company that owes the money is liquidated, the unsecured lender receives money only after the secured lenders have been paid.
unusual but not extraordinary item
An item that does not meet the two criteria of being an extraordinary item (unusual in nature and infrequent in occurrence). As a result, this item remains in the main portion of the income statement. For example, a loss due to a labor strike and the damage to the citrus crop in Florida are not extraordinary items. However, it would be helpful to the readers of the financial statements for these items to be reported as separate line items in the main portion of the income statement.
U.S. treasury bills
Federal government securities sold at a discount (because of no interest payments) with maturity dates of less than one year.
U.S. treasury bonds
Federal government securities with a fixed interest rate and maturing in more than 10 years.
U.S. treasury notes
Federal government securities with a fixed interest rate and maturing in 10 years or less.
usage variance
See direct materials usage variance and the Explanation of Standard Costs & Variances.
useful life
This is the period of time that it will be economically feasible to use an asset. Useful life is used in computing depreciation on an asset, instead of using the physical life. For example, a computer might physically last for 100 years; however, the computer might be useful for only three years due to technology enhancements that are occurring. As a consequence, for financial statement purposes the computer will be depreciated over three years.
utilities expense
Under the accrual basis of accounting, this account reports the cost of the electricity, heat, sewer, and water used during the period indicated in the heading of the income statement. Because utility companies deliver the service and then later measure the amounts used and then prepare the billing, a company's Utilities Expense amount should be based on the amount of utilities used during the period (as opposed to the amount paid during the accounting period). The amount of Utilities Expense for the sales function is classified as a selling expense and the amount used for administration is classified as an administrative expense. Utilities used in the manufacturing process will be part of the cost of the products manufactured.
utilities payable
A current liability account that reports the amounts owed to the utility companies for electricity, gas, water, phone used up to the date of the balance sheet. If a utility bill has not been received, the company will have to estimate the amount owed for the service it has used up to the balance sheet date. Instead of using a separate account for utilities payable, the amounts owed are often included in Accounts Payable.
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