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Financial Terms | |
Accounting period |
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Definition of Accounting periodAccounting periodThe period of time for which financial statements are produced – see also financial year.
Related Terms:Adjusting entriesThe entries needed at the end of an accounting period to properly state certain account balances. Balance SheetA financial statement showing the financial position of a business – its assets, liabilities and Cash Flow statementA financial report that shows the movement in cash for a business during an accounting period. Change in Accounting EstimateA change in accounting that occurs as the result of new information Constant dollar accountingA method for restating financial statements by reducing or DividendThe payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period. Ending inventoryThe dollar value or unit total of goods on hand at the end of an ![]() Financial yearThe accounting period adopted by a business for the production of its financial statements. IncomeNet earnings after all expenses for an accounting period are subtracted from all Inventory TurnoverRatio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period. LossAn excess of expenses over revenues, either for a single business transaction or in Operating profitThe profit made by the business for an accounting period, equal to gross profit less selling, finance, administration etc. expenses, but before deducting interest or taxation. Prepaid expenseAn expenditure that is paid for in one accounting period, but which Profit and Loss accountA financial statement measuring the profit or loss of a business – income less expenses – for an accounting period. ProrationThe allocation of either under- or over-allocated overhead costs among the Straight line depreciationAn equal dollar amount of depreciation in each accounting period. ![]() Temporary accountsThe accounts found on the Income Statement and the Statement of Retained Earnings; these accounts are reduced to zero at the end of every accounting period. TurnoverMutual Funds: A measure of trading activity during the previous year, expressed as a percentage of UNITS OF PRODUCTIONA depreciation method that relates a machine’s depreciation to the number of units it makes each AccountingA collection of systems and processes used to record, report and interpret business transactions. accountingA broad, all-inclusive term that refers to the methods and procedures Accounting and Auditing Enforcement Release (AAER)Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws. Accounting changeAn alteration in the accounting methodology or estimates used in Accounting earningsEarnings of a firm as reported on its income statement. Accounting entityA business for which a separate set of accounting records is being Accounting equationThe representation of the double-entry system of accounting such that assets are equal to liabilities plus capital. Accounting equationThe formula Assets = Liabilities + Equity. ![]() accounting equationAn equation that reflects the two-sided nature of a Accounting ErrorsUnintentional mistakes in financial statements. Accounted for by restating Accounting exposureThe change in the value of a firm's foreign currency denominated accounts due to a Accounting insolvencyTotal liabilities exceed total assets. A firm with a negative net worth is insolvent on Accounting IrregularitiesIntentional misstatements or omissions of amounts or disclosures in Accounting liquidityThe ease and quickness with which assets can be converted to cash. Accounting PoliciesThe principles, bases, conventions, rules and procedures adopted by management in preparing and presenting financial statements. Accounting rate of return (ARR)A method of investment appraisal that measures accounting rate of return (ARR)the rate of earnings obtained on the average capital investment over the life of a capital project; computed as average annual profits divided by average investment; not based on cash flow Accounting systemA set of accounts that summarize the transactions of a business that have been recorded on source documents. Accrual accountingThe recording of revenue when earned and expenses when accrual-basis accountingWell, frankly, accrual is not a good descriptive Accruals accountingA method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred. Aggressive AccountingA forceful and intentional choice and application of accounting principles Annualized holding period returnThe annual rate of return that when compounded t times, would have Annuity PeriodThe time between each payment under an annuity. Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average Amortization PeriodThe average useful life of a company's collective amortizable asset base. Average Collection PeriodAverage number of days necessary to receive cash for the sale of Average collection period, or days' receivablesThe ratio of accounts receivables to sales, or the total Cash accountingA method of accounting in which profit is calculated as the difference between income Change in Accounting EstimateA change in the implementation of an existing accounting Change in Accounting PrincipleA change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures Compounding periodThe length of the time period (for example, a quarter in the case of quarterly compounding periodthe time between each interest computation Contract AccountingMethod of accounting for sales or service agreements where completion cost accountinga discipline that focuses on techniques or Cost Accounting Standards Board (CASB)a body established by Congress in 1970 to promulgate cost accounting Creative Accounting PracticesAny and all steps used to play the financial numbers game, including Creative Acquisition AccountingThe allocation to expense of a greater portion of the price Credit periodThe length of time for which the customer is granted credit. Critical Growth PeriodsTimes in a company's history when growth is essential and without which survival of the business might be in jeopardy. Cumulative Effect of a Change in Accounting PrincipleThe change in earnings of previous years Cumulative Effect of Accounting ChangeThe change in earnings of previous years assuming Discount periodThe period during which a customer can deduct the discount from the net amount of the bill Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an double-entry accountingSee accrual-basis accounting. Evaluation periodThe time interval over which a money manager's performance is evaluated. Extended Amortization PeriodAn amortization period that continues beyond a long-lived asset's economic useful life. Extended Amortization PeriodsAmortizing capitalized expenditures over estimated useful lives that are unduly optimistic. Financial accountingThe production of financial statements, primarily for those interested parties who are external to the business. financial accountinga discipline in which historical, monetary Full Credit PeriodThe period of trade credit given by a supplier to its customer. Gain-on-Sale AccountingUp-front gain recognized from the securitization and sale of a pool Generally Accepted Accounting Principals (GAAP)A technical accounting term that encompasses the Generally accepted accounting principlesThe rules that accountants follow when processing accounting transactions and creating financial reports. The rules are primarily generally accepted accounting principles (GAAP)This important term generally accepted accounting principles (GAAP)Procedures for preparing financial statements. Generally Accepted Accounting Principles (GAAP)A common set of standards and procedures Generally Accepted Accounting Principles (GAAP)GAAP is the term used to describe the underlying rules basis on which financial statements are normally prepared. This is codified in the Handbook of The Canadian Institute of Chartered Accountants. Grace PeriodA specific period of time after a premium payment is due during which the policy owner may make a payment, and during which, the protection of the policy continues. The grace period usually ends in 30 days. Grace PeriodLength of time during which repayments of loan principal are excused. Usually occurs at the start of the loan period. Holding periodLength of time that an individual holds a security. Holding period returnThe rate of return over a given period. internal accounting controlsRefers to forms used and procedures Management accountingThe production of financial and non-financial information used in planning for the future; making decisions about products, services, prices and what costs to incur; and ensuring that plans are implemented and achieved. management accountinga discipline that includes almost Management Accounting Guidelines (MAGs)pronouncements of the Society of Management Accountants of Multiperiod immunizationA portfolio strategy in which a portfolio is created that will be capable of Net periodThe period of time between the end of the discount period and the date payment is due. Neutral periodIn the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not Odd first or last periodFixed-income securities may be purchased on dates Payback PeriodThe number of years necessary for the net cash flows of an payback periodthe time it takes an investor to recoup an payback periodTime until cash flows recover the initial investment of the project. period costcost other than one associated with making or acquiring inventory Period costsThe costs that relate to a period of time. periodic compensationa pay plan based on the time spent on the task rather than the work accomplished Periodic inventoryA physical inventory count taken on a repetitive basis. Periodic inventory systemAn inventory system in which the balance in the Inventory account is adjusted for the units sold only at the end of the period. PPF (periodic perpetuity factor)a generalization formula invented by Abrams that is the present value of regular but noncontiguous cash flows that have constant growth to perpetuity. Purchase accountingMethod of accounting for a merger in which the acquirer is treated as having purchased Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |