Accounting Terminology Guide Over 1,000 Accounting and Finance Terms

Change in (1) an accounting principle; (2) an accounting estimate; or (3) the reporting entity that necessitates DISCLOSURE and explanation in published financial reports. Recording and reporting of financial transactions, including the origination of the transaction, its recognition, processing, and summarization in the FINANCIAL STATEMENTS. https://www.bookstime.com/ An approach to product costing that assigns a representative portion of all types of manufacturing costs–direct materials, direct labor, variable factory overhead, and fixed factory overhead–to individual products. Management accounting is all about giving business owners or managers the information they need to make smart decisions.

A person entering into a short sale believes the price of the item will decline between the date of the short sale and the date he or she must purchase the item to deliver the item under the terms of the short sale. Total amount of shares of stock that have been sold short and have not yet been repurchased to close out short positions. Organized, national EXCHANGES where securities, options, and futures contracts are traded by members for their own accounts and for the accounts of customers.

Accounting Terminology Guide – Over 1,000 Accounting and Finance Terms

Currently, ABC Co. holds a bank balance of $50,000 in this bank account. It shows the balance after reducing all payments made from the receipts into the bank account. This balance also represents how much money is available for the entity to spend.

The transferee received assets of the transferor-taxpayer; and
2. The transferor was INSOLVENT at the time or was rendered insolvent by that transfer or related series of transfers. An organizational environment in which all business functions work together to build quality into the firm’s products or services. Increase in the number of shares of a company’s COMMON STOCK outstanding that result from the issuance of additional shares proportionally to existing stockholders without additional capital investment.

Bond Indenture

The liabilities section is broken out similarly as the assets section, with current liabilities and non-current liabilities reporting balances by account. The total shareholder’s equity section reports common stock value, retained earnings, and accumulated other comprehensive income. Apple’s total liabilities increased, total equity decreased, and the combination of the two reconcile to the company’s total assets. The balance sheet includes information about a company’s assets and liabilities. Depending on the company, this might include short-term assets, such as cash and accounts receivable, or long-term assets such as property, plant, and equipment (PP&E). Likewise, its liabilities may include short-term obligations such as accounts payable and wages payable, or long-term liabilities such as bank loans and other debt obligations.

An INCOME STATEMENT that projects the NET INCOME of a business for a future period. A shipping term that means that the buyer bears transportation costs from the point of origin. A shipping term that define balancing in accounting means that the seller bears transportation costs to the place of delivery. Period of 12 consecutive months chosen by an entity as its ACCOUNTING period which may or may not be a calendar year.

Capital Asset Pricing Model (CAPM)

It helps you to understand how money comes in and how it goes out. Accounting is like a powerful machine where you input raw data (figures) and get processed information (financial statements). The whole point is to give you an idea of what’s working and what’s not working so that you can fix it.

• The promissory note may or may not accompany other instruments such as a MORTGAGEproviding security for the payment thereof.
• Amount, expressed as a percentage of total investment, that shareholders pay for MUTUAL FUND operating expenses and management fees.
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• This transaction affects only the assets of the equation; therefore there is no corresponding effect in liabilities or shareholder’s equity on the right side of the equation.
• For example, an increase in an asset account can be matched by an equal increase to a related liability or shareholder’s equity account such that the accounting equation stays in balance.
• Inquiries may range from formal written inquiries to informal oral inquiries.