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Definition
| process of identifying, measuring, and reporting financial information of an entity |
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| Method that records greater depreciation than straight-line depreciation in the early years and less depreciation than straight-line in the later years of an asset's holding period |
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| Amount owed to a creditor for delivered goods or completed services |
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| Claim against a debtor for an uncollected amount, generally from a completed transaction of sales or services rendered |
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| A professional examination of a company's financial statement by a professional accountant or group to determine that the statement has been presented fairly and prepared using GAAP |
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| Accounts Receivable Turnover |
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Definition
| A ratio used to measure a company's ability to collect cash from credit customers |
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| Method of accounting that recognizes revenue when earned, rather than when collected. Expenses are recognized when incurred rather than when paid |
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| Accumulated Depreciation (Contra Account) |
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Definition
| Total depreciation pertaining to an asset or group of assets from the time the assets were placed in service until the date of the financial statement or tax return. |
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| The relationship of a company's current assets that can be converted into cash to its current liabilities. (Quick Assets/Current Liabilities) |
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| Mathematician employed by an insurance company to calculate premiums, reserves, dividends, and insurance, pension, and annuity rates, using risk factors obtained from experience tables |
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| Amounts paid for stock in excess of its par value or stated value |
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| The beginning point for the determination of income, including income from whatever sources derived |
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| ADR (American Depository Receipt) |
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Definition
| Receipts for shares of foreign company stock maintained by an intermediary indicating ownership |
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| Expression of an opinion in an auditor's report which states that financial statements do not fairly present the financial position, results of operations and cash flows in conformity with GAAP |
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| National professional membership organization that represents practicing CPAs. It establishes ethical and auditing standards and develops guidance for specialized industries |
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| Allowance for Doubtful Accounts |
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Definition
| A contra-asset account used to reduce Accounts Receivable to the amount that is expected to be collected in cash |
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Definition
| Gradual and periodic reduction of any amount, such as the periodic writedown of a bond premium, the cost of an intangible asset or periodic payment of mortgages or other debt |
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| Analytical Procedures: 1)comparison of financial information with information of comparable prior periods, 2) comparison of financial information with anticipated results (e.g., forecasts), 3) study of relationships between elements of financial information that should conform to predictable patterns based on the entity's experience, 4) comparison of financial information with industry norms |
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Definition
| Substantive tests of financial information which examine relationships among data as a means of obtaining evidence |
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| Accounting Principles Board |
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| Anything of value to which the firm has a legal claim OR Any owned tangible or intangible object having economic value useful to the owner |
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Definition
| A professional examination of a company's financial statements by a professional accountant or group to determine that the statements have been presented fairly and prepared using GAAP |
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Definition
| A process by which an accountant determines whether and why there is a difference between the balance shown on the bank statement and the balance of the cash account in the firm's general ledger |
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| A periodic statement, usually monthly, that a bank send to the holder of a checking account showing the balance in the account at the beginning of the month, during, and at the end of the month |
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| Measure of a stock's relative volatility |
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| Individuals responsible for overseeing the affairs of an entity, including the election of its officers. |
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| One type of long-term promissory note, frequently issued to the public as a security regulated under federal securities laws |
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| Book Value (OR Carrying Value) |
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Definition
| Amount, net or contra account balances, that an asset or liability shows on the balance sheet of a company. |
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Definition
| The process of recording financial transactions and keeping financial records |
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| Capital Asset Pricing Model |
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Definition
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Term
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Definition
| Portion of the total gain recognized on the sale or exchange of a non-inventory asset which is not taxed as ordinary income |
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| Ownership shares of a corporation authorized by its articles of incorporation. |
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Definition
| Convert a schedule of income into a principal amount, called capitalized value, by dividing by a rate of interest |
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Definition
| Asset account on a balance sheet representing paper currency and coins, negotiable money orders and checks, bank balances, and certain short-term government securities |
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Definition
| Ratio of cash and marketable securities to current liabilities |
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Definition
| Formal instrument issued by a bank upon the deposit of funds which may not be withdrawn for a specified period of time |
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Definition
| Capital stock having no preferences generally in terms of dividends, voting rights, or distributions |
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Definition
| Account considered to be an offset to another account. Generally established to reduce the other account to amounts that can be realized or collected |
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Definition
| Procedures used for rationally classifying, recording, and allocating current or predicted costs that relate to a certain product or production process |
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Definition
| Figure representing the cost of buying raw materials and producing finished goods |
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Definition
| The difference between net sales and cost of goods sold |
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Definition
| Method of revenue recognition which recognizes profits after costs are completely recovered |
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Definition
| Interest rate on a debt security the issuer promises to pay to the holder until maturity, expressed as an annual percentage of face value |
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Definition
| Annual interest on a bond divided by the market price |
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Definition
| General debt obligation backed only by the integrity of the borrower and documented by an agreement called an indenture |
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Definition
| Fund whose principal or interest is set aside and accumulated to retire debt |
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Definition
| Compensation arrangement, generally in writing, used by employers in addition to salaries or wages |
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Definition
| Method of computing a deduction to account for a reduction in value of extractable natural resources |
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Definition
| Costs of a business that are not directly associated with the production or sale of goods or services |
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Definition
| Bond selling below its redemption value |
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Definition
| Price to be paid by an entity to retire its bonds or preferred stock |
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Definition
| Percentage of earnings paid to shareholders in cash |
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Term
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Definition
| Dividends on cumulative preferred stock that remain unpaid in the year they are due |
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Definition
| Method of recording financial transactions in which each transaction is entered in two or more accounts and involves two-way, self-balancing posting. |
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| Effective Interest Method |
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Definition
| A way of amortizing bond discounts or premiums by applying a constant interest rate to the carrying value of the bonds at the beginning of each interest period |
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Term
| Earned Income Tax Credit (EITC) |
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Definition
| A refundable tax credit for eligible low income workers, subject to computations based on qualifying children and phase in and phase out income levels |
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Definition
| Residual interest in the assets of an entity that remains after deducting its liabilities |
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Term
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Definition
| Income item which is excluded from a taxpayer's gross income by the IRC or an administrative action |
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Term
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Definition
| Amount of a taxpayer's income that is not subject to tax |
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| Extraordinary Items (reported separately, less applicable income taxes) |
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Definition
| Events and transactions distinguished by their usual nature and by the infrequency of their occurrence. |
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Definition
| Amount due at maturity from a bond or note |
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Definition
| Price at which property would change hands between a buyer and a seller without any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts |
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| Financial Accounting Standards Board |
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Definition
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Definition
| Person who is responsible for the administration of property owned by others |
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Definition
| Accounting method of valuing inventory under which the costs of the first goods acquired are the first costs charged to expense |
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Definition
| The ability to increase earnings for stockholders by earning more on assets than is paid in interest on debt incurred to finance the assets |
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Definition
| A shipping term that means that the seller bears transportation costs to the place of delivery |
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Definition
| A shipping term that means that the buyer bears the transportation costs from the point of origin |
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Definition
| Transportation charges on merchandise purchased for resale |
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Term
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Definition
| Transportation costs on merchandise sold |
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Term
| GAAP (Generally Accepted Accounting Principles) |
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Definition
| Conventions, rules, and procedures necessary to define accepted accounting practice at a particular time |
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| GASB (Governmental Accounting Standards Board) |
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Definition
| Group that has authority to establish standards of financial reporting for all units of state and local government |
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Definition
| Collection of all asset, liability, owner's equity, revenue, and expense accounts |
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Definition
| A partnership with no limited partners |
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Definition
| The sum of beginning inventory and the net cost of purchases during a period |
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Definition
| Premium paid in acquisition of an entity over the fair value of its identifiable tangible and intangible assets less liabilities assumed |
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Term
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Definition
| Premium paid in acquisition of an entity over the fair value of its identifiable tangible and intangible assets less liabilities assumed |
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Definition
| A temporary account used during the closing process that holds a summary of all revenues and expenses before the net income or loss is transferred to the capital account |
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Definition
| When an entity's liabilities exceed its assets |
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Definition
| A way of measuring the degree of protection that a creditor has from a debtor's default on interest payments |
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Definition
| Process designed to provide reasonable assurance regarding achievement of various management objectives such as the reliability of financial reports |
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Definition
| Bill prepared by a seller of goods or services and submitted to the purchaser |
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Definition
| Writing checks against a bank account with insufficient funds to cover them, hoping that the bank will receive deposits before the checks arrive for clearance |
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Definition
| Accounting method of valuing inventory under which the costs of the last goods acquired are the first costs charged to expense |
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Definition
| Creditor's claim against a property |
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Definition
| Excess of selling price over the unit cost |
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Definition
| Stocks and other negotiable instruments which can be easily bought and sold on either listed exchanges or over-the-counter markets |
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Definition
| Legal instrument evidencing a security interest in assets, usually real estate |
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