Payee
payee - The party to whom a note is made payable
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accounting
Accounting
Pension Plan
pension plan - A general term to describe some form of arrangement for continuing payments to retirees
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accounting
Periodic Inventory System
periodic inventory system - An inventory system that utilizes a Purchases account and does not update inventory with each sale; inventory is updated by physi...
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accounting
Periodicity Assumption
periodicity assumption - An accounting assumption that purports to divide a continuous business process into measurement intervals, such as months, quarters,...
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accounting
Perpetual Inventory System
perpetual inventory system - A "real-time" inventory system that updates inventory records with each purchase and sale
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accounting
Petty Cash
petty cash - A fund established for making small payments that are impractical to pay by check; also known as imprest cash fund
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accounting
Physical Inventory
physical inventory - The process of counting inventory actually on hand
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accounting
Posting
posting - The process of transferring journal entry effects into the respective general ledger accounts
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accounting
Preemptive Right
preemptive right - A right that may or may not be provided to shareholders enabling them with a first right of refusal to buy any additional shares offered b...
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accounting
Preferred Stock
preferred stock - A class of stock that generally benefits from a stipulated periodic dividend and priority in liquidation; but, usually lacking in upside pa...
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accounting
Premium on Bonds
premium on bonds - The difference between face value and issue price of a bond, where the issue price is more; causes the effective yield to be lower than th...
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accounting
Prepaid Expenses
prepaid expenses - Goods or services purchased in advance of their consumption
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accounting
Present Value
present value - Also known as discounting; determines the current worth of cash to be received in the future
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accounting
Price Earnings Ratio
price earnings ratio - The per share market value of a stock divided by its earnings per share
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accounting
Principal
principal - The basic stated amount of a note on which interest is usually calculated; generally relating to the amount borrowed
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accounting
Principles-based
principles-based - The idea that accounting standards should articulate broad-based principles rather than specific and detailed rules
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accounting
Product-level Activity
product-level activity - Activities that relate to the number of products produced; independent of the number of units produced
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accounting
Proof of Cash
proof of cash - A detailed bank reconciliation that verifies not only beginning and end balances, but also validates deposits and withdrawals during the month
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accounting
Purchase Discounts
purchase discounts - A cash discount available on purchases of merchandise on account; encourages prompt payment
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accounting
Dashboard
dashboard - Customized business software that delivers key real time business data in an easily monitored layout
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accounting
Database
database - An information storehouse, usually electronic, that can be queried to extract data meeting certain parameters. Enables singular data entry and mul...
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accounting
Debenture Bond
debenture bond - A bond that lacks specific collateral; payment is only assured by the general faith and creditworthiness of the issuer
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accounting
Debit Card
debit card - Transactions are equivalent to an electronically generated check that results in an almost immediate withdrawal of funds.
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accounting
Debit Memorandum
debit memorandum - A purchaser-prepared document evidencing a return of merchandise to a seller
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accounting
Decentralized Decision Making
decentralized decision making - A business style where top leaders concentrates on strategy, and leaves day-to-day operation and decision-making tasks to low...
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accounting
Declining Balance Depreciation Method
declining balance depreciation method - An accelerated depreciation method by which a constant rate (that is a multiple of the straight-line rate) is multipl...
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accounting
Defined Contribution Plan
defined contribution plan - A type of pension plan where the benefits are based on amounts in trust for the benefit of the employee; employer contributions a...
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accounting
Deposits in Transit
deposits in transit - Receipts entered on company records but not yet posted by the bank
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accounting
Derivatives
derivatives - Investments accounted for a fair value that generally derive their value from some other item; examples include commodity futures, options, and...
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accounting
Diluted EPS
diluted EPS - An earnings per share number; adjusted to reflect the potential effect of dilutive securities
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accounting
Dilutive Securities
dilutive securities - Options, warrants, convertible bonds, convertible stocks, and other items that have the potential to increase the number of shares outs...
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accounting
Direct Labor
direct labor - Gross wages paid to those who physically and directly work on the goods being produced
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accounting
Direct Labor Efficiency Variance
direct labor efficiency variance - A variance comparing standard hours of direct labor to the actual hours worked; measured at the standard rate per hour [(s...
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accounting
Direct Labor Rate Variance
direct labor rate variance - A variance that reveals the difference between the standard rate and actual rate for the actual labor hours worked [(standard ra...
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accounting
Direct Write-off Method
direct write-off method - A simple, non-GAAP, method that expenses uncollectible accounts only as they are determined to be uncollectible and are written off
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accounting
Discount on Bonds
discount on bonds - The difference between face value and issue price of a bond, where the issue price is less; causes the effective yield to be higher than ...
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accounting
Dishonoring a Note
dishonoring a note - To fail to pay a note at maturity
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accounting
Dividend Payout Ratio
dividend payout ratio - Dividend per share divided by earnings per share
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accounting
Dividend Rate
dividend rate - Dividend per share divided by stock price; also called dividend yield
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accounting
Dividends
dividends - Amounts paid from profits of a corporation to shareholders as a return on their investment in the stock of the entity
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accounting
Dividends in Arrears
dividends in arrears - An omitted dividend on cumulative preferred stock that must eventually be paid before any monies can be distributed to common stockhol...
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accounting
Double-declining Balance Depreciation
double-declining balance depreciation - An accelerated depreciation method by which a constant rate (that is 200% of the straight-line rate) is multiplied by...
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accounting
Economies of Scale
economies of scale - Efficiencies associated with increases in volume
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accounting
Effective-interest Amortization
effective-interest amortization - A theoretically preferable method for amortizing premiums and discounts on bonds; interest expense is a constant percentage...
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accounting
Employee
employee - A person who works for a specific business and whose activities are directed by that business
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accounting
Enterprise Resource Packages
Enterprise Resource Packages - (ERP) Comprehensive database software that tracks an almost endless array of business and accounting data
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accounting
Entity Assumption
entity assumption - Accounting information should be presented for circumscribed distinct economic units
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accounting
Entity-sustaining Activity
entity-sustaining activity - Activities that relate to an entity's ability to operate; independent of business volume
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accounting
Equivalent Units
equivalent units - A measure of physical units expressed in terms of finished units
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accounting
Ex-dividend
ex-dividend - The event (date) when a transfer of stock ownership between shareholders will occur without the right for the purchaser to receive any previous...
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accounting
F.o.b. Destination
F.O.B. destination - Free on Board destination; meaning the transfer of ownership of inventory will occur when the goods reach their destination and the sell...
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accounting
F.o.b. Shipping Point
F.O.B. shipping point - Free on Board shipping point; meaning the transfer of ownership of inventory will occur when the goods are shipped and the purchaser ...
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accounting
Fair Value Accounting
fair value accounting - Sometimes called "mark-to-market;" to record an investment at its fair value and recognize changes in value as they occur
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accounting
Faithful Representation
faithful representation - A fundamental quality of accounting such that information must be truthful; complete, neutral, and free from error
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accounting
Financial Accounting
financial accounting - An area of accounting that deals with external reporting to parties outside the firm; usually based on standardized rules and procedures
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accounting
Financing Activities
financing activities - A cash flow category; including receipts from stock issues, bonds, notes and loans, -- and payments for loan repayment, acquisitions o...
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accounting
Financing Lease
financing lease - A lease that effectively transfers the risks and rewards of ownership to the lessee
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accounting
Fiscal Year
fiscal year - A one-year accounting period that does not correspond to a calendar year
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accounting
Future Value
future value - Or "compound interest;" amount that a current payment (or stream of payments) will grow in time; includes interest on previous interest based ...
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accounting
GAAP
GAAP - Generally accepted accounting principles -- encompass the rules, practices, and procedures that define the proper execution of accounting
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accounting
Going-concern Assumption
going-concern assumption - In the absence of evidence to the contrary, accountants assume that a business will continue to operate well into the future
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accounting
Goods Available for Sale
goods available for sale - A calculated amount corresponding to the beginning inventory plus net purchases; represents the total pool of inventory available ...
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accounting
Goods in Transit
goods in transit - Goods in the process of being transported to the buyer; ownership is based on freight terms
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accounting
Gross Method
gross method - A method of recording purchases of inventory at invoice price
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accounting
Ideal Standards
ideal standards - A standard that could only be achieved under perfect operating conditions; such standards are rarely expected to be achieved
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accounting
Independent Contractor
independent contractor - One who performs a designated task or service for a company, and the company has the right to control or direct only the result of t...
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accounting
Initial Public Offering
initial public offering - The first time stock in a corporation is offered to the investing public; registration and other requirements must be met; proceeds...
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accounting
Institute of Management Accountants
Institute of Management Accountants - (IMA) a professional association for management accountants that sponsors the CMA and CFM designations
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accounting
Interest
interest - The charge imposed on the borrower of funds for the use of money
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accounting
Internal Auditor
internal auditor - A person within an organization who reviews and monitors the controls, procedures, and information of the organization
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accounting
Internal Rate of Return
internal rate of return - Also known as time-adjusted rate of return or IRR; discount rate causing present value of cash inflows to equal present value of th...
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accounting
International Accounting Standards Board
International Accounting Standards Board - An organization charged with producing accounting standards with global acceptance
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accounting
International Financial Reporting Standards (IFRS)
International Financial Reporting Standards (IFRS) - The specific accounting rules developed by the International Accounting Standards Board
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accounting
Inventory
inventory - Goods held for resale to others
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accounting
Investee
investee - The company in which another has an investment
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accounting
Invoice Price
invoice price - List price less any trade discounts
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accounting
Journal
journal - A chronological listing of the transactions and events of an organization, in debit/credit format
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accounting
Journalizing
journalizing - The process of recording transactions and events into the journal
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accounting
Junk Bond
junk bond - A bond that is issued by a company of low credit worthiness, and entails substantial risk of nonpayment; generally offers a high interest rate to...
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accounting
Kaizen
Kaizen - Japanese term used to describe a blitz like approach to study processes and install efficiency within an organization
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accounting
Kanban
Kanban - Japanese term which means some form of signal that a particular inventory is ready for replenishment
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accounting
Lean Manufacturing
lean manufacturing - Indicative of an environment where waste has been trimmed; entails a focus on standardization, speed, and quality, without compromising ...
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accounting
Legal Capital
legal capital - Usually the par value of the stock of a corporation
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accounting
Liabilities
liabilities - Amounts owed by an entity to others
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accounting
Liquidity
liquidity - The ability of a firm to meet its near-term obligations as they come due
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accounting
List Price
list price - An established price determined by reference to a catalog or general price list; before any discounts
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accounting
Long-term Investments
long-term investments - Investments made for long-term holding purposes; including land for speculation, securities of other companies, etc.
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accounting
Long-term Liabilities
long-term liabilities - Any obligation that is not current, and include bank loans, mortgage notes, and the like
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accounting
Contra Asset
contra asset - An account that is subtracted from a related account -- contra accounts have opposite debit/credit rules
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accounting
Control Account
control account - The total of all subcomponent account records for an account; e.g., the sum of all individual accounts receivable
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accounting
Convertible Bond
convertible bond - A bond that may be converted by the holder into stock of the issuing company
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accounting
Convertible Preferred
convertible preferred - Preferred stock that can be exchanged for common stock at some preagreed ratio
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accounting
Corporation
corporation - A form of business organization where ownership is represented by divisible units called shares of stock
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accounting
Coupon Bond
coupon bond - A bond that has detachable coupons that are exchanged for interest payments; historically popular but falling into disuse
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accounting
Credit Memorandum
credit memorandum - A seller-prepared document evidencing an approved return of merchandise for credit against an account
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accounting
Cumulative Preferred
cumulative preferred - Preferred stock that is entitled to a periodic dividend, and those dividends must be paid (eventually) before any monies can be distri...
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accounting
Current Liabilities
current liabilities - Obligations that will be liquidated within one year or the operating cycle, whichever is longer
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accounting
Customer-level Activity
customer-level activity - Activities that relate to each customer; independent of the volume of goods and services provided to the specific customer
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accounting
Callable Bond
callable bond - A bond that provides the issuer an option to reacquire the bonds before scheduled maturity at a preset price
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accounting
Callable Preferred
callable preferred - Preferred stock that can be repurchased by issuer for a preset price
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accounting