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Financial Terms | |
Contra-asset account |
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Definition of Contra-asset accountContra-asset accountAn offset to an asset account that reduces the balance of the asset account.
Related Terms:bad debtsRefers to accounts receivable from credit sales to customers AccountAn explanation or report in financial terms about the transactions of an organization. Account ValueThe sum of all the interest options in your policy, including interest. AccountabilityThe process of satisfying stakeholders in the organization that managers have acted in the best interests of the stakeholders, a result of the stewardship function of managers, which takes place through accounting. 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 periodThe period of time for which financial statements are produced – see also financial year. 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. Accounts‘Buckets’ within the ledger, part of the accounting system. Each account contains similar transactions (line items) that are used for the production of financial statements. Or commonly used as an abbreviation for financial statements. Accounts payableMoney owed to suppliers. ACCOUNTS PAYABLEAmounts a company owes to creditors. Accounts payableAmounts owed by the company for goods and services that have been received, but have not yet been paid for. Usually accounts payable involves the receipt of an invoice from the company providing the services or goods. ![]() accounts payableShort-term, non-interest-bearing liabilities of a business Accounts payableAcurrent liability on the balance sheet, representing short-term obligations Accounts PayableAmounts due to vendors for purchases on open account, that is, not evidenced Accounts Payable Days (A/P Days)The number of days it would take to pay the ending balance Accounts receivableMoney owed by customers. ACCOUNTS RECEIVABLEAmounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts. Accounts receivableAmounts owed to the company, generally for sales that it has made. accounts receivableShort-term, non-interest-bearing debts owed to a Accounts receivableA current asset on the balance sheet, representing short-term Accounts ReceivableAmounts due from customers for sales on open account, not evidenced Accounts ReceivableMoney owed to a business for merchandise or services sold on open account. Accounts Receivable Days (A/R Days)The number of days it would take to collect the ending Accounts receivable turnoverThe ratio of net credit sales to average accounts receivable, a measure of how accounts receivable turnover ratioA ratio computed by dividing annual 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. Acquisition of assetsA merger or consolidation in which an acquirer purchases the selling firm's assets. Aggressive AccountingA forceful and intentional choice and application of accounting principles Allowance for doubtful accountsA contra account related to accounts receivable that represents the amounts that the company expects will not be collected. Allowance for Doubtful AccountsAn estimate of the uncollectible portion of accounts receivable AssetAny possession that has value in an exchange. AssetA resource, recorded through a transaction, that is expected to yield a benefit to a AssetSomething that is owned; a financial claim or a piece of property that is a store of value. AssetProbable future economic benefit that is obtained or controlled by an entity as a result of assetAnything owned by, or owed to, an individual or business which has commercial or exchange value (e.g., cash, property, etc.). AssetAll things of value owned by an individual or organization. Asset activity ratiosRatios that measure how effectively the firm is managing its assets. Asset allocation decisionThe decision regarding how an institution's funds should be distributed among the Asset-Backed SecuritiesBond or note secured by assets of company. Asset-backed securityA security that is collateralized by loans, leases, receivables, or installment contracts Asset-based financingMethods of financing in which lenders and equity investors look principally to the Asset-Based FinancingLoans granted usually by a financial institution where the asset being financed constitutes the sole security given to the lender. Asset classesCategories of assets, such as stocks, bonds, real estate and foreign securities. Asset CoverageExtent to which a company's net assets cover a particular debt obligation, class of preferred stock, or equity position. Asset-coverage testA bond indenture restriction that permits additional borrowing on if the ratio of assets to Asset/equity ratioThe ratio of total assets to stockholder equity. Asset for asset swapCreditors exchange the debt of one defaulting borrower for the debt of another Asset/liability managementAlso called surplus management, the task of managing funds of a financial asset mixThe weighting of assets in an investment portfolio among different asset classes (e.g. shares, bonds, property, cash, overseas investments. Asset pricing modelA model for determining the required rate of return on an asset. Asset pricing modelA model, such as the Capital asset Pricing Model (CAPM), that determines the required Asset-specific RiskThe amount of total risk that can be eliminated by diversification by Asset substitutionA firm's investing in assets that are riskier than those that the debtholders expected. Asset substitution problemArises when the stockholders substitute riskier assets for the firm's existing Asset swapAn interest rate swap used to alter the cash flow characteristics of an institution's assets so as to Asset turnoverThe ratio of net sales to total assets. asset turnovera ratio measuring asset productivity and showing the number of sales dollars generated by each dollar of assets asset turnover ratioA broad-gauge ratio computed by dividing annual AssetsA firm's productive resources. ASSETSAnything of value that a company owns. AssetsThings that the business owns. AssetsItems owned by the company or expenses that have been paid for but have not been used up. Assets requirementsA common element of a financial plan that describes projected capital spending and the Average accounting returnThe average project earnings after taxes and depreciation divided by the average Average age of accounts receivableThe weighted-average age of all of the firm's outstanding invoices. Balance of Payments AccountsA statement of a country's transactions with other countries. Bullet contractA guaranteed investment contract purchased with a single (one-shot) premium. Related: Capital accountNet result of public and private international investment and lending activities. Capital AccountThat part of the balance of payments accounts that records demands for and supplies of a currency arising from purchases or sales of assets. capital assetan asset used to generate revenues or cost savings Capital assetA fixed asset, something that is expected to have long-term usage within Capital asset pricing model (CAPM)An economic theory that describes the relationship between risk and Capital Asset Pricing Model (CAPM)A model for estimating equilibrium rates of return and values of capital asset pricing model (CAPM)Theory of the relationship between risk and return which states that the expected risk Capitalized Cost An expenditure or accrual that is reported as an asset to be amortized againstfuture-period revenue. Cash accountingA method of accounting in which profit is calculated as the difference between income Cash settlement contractsFutures contracts, such as stock index futures, that settle for cash, not involving Certified Management Accountant (CMA)a professional designation in the area of management accounting that Change in Accounting EstimateA change in accounting that occurs as the result of new information 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 Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |