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Definition of Contra-equity account
An account that reduces an equity account. An example is Treasury stock.
An explanation or report in financial terms about the transactions of an organization.
The sum of all the interest options in your policy, including interest.
The 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.
A collection of systems and processes used to record, report and interpret business transactions.
A broad, all-inclusive term that refers to the methods and procedures
Administrative proceedings or litigation releases that entail an accounting or auditing-related violation of the securities laws.
An alteration in the accounting methodology or estimates used in
Earnings of a firm as reported on its income statement.
A business for which a separate set of accounting records is being
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The formula Assets = Liabilities + equity.
An equation that reflects the two-sided nature of a
Unintentional mistakes in financial statements. accounted for by restating
The change in the value of a firm's foreign currency denominated accounts due to a
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
Intentional misstatements or omissions of amounts or disclosures in
The ease and quickness with which assets can be converted to cash.
The period of time for which financial statements are produced – see also financial year.
The 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
A set of accounts that summarize the transactions of a business that have been recorded on source documents.
‘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.
Money owed to suppliers.
Amounts a company owes to creditors.
Amounts 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.
Short-term, non-interest-bearing liabilities of a business
Acurrent liability on the balance sheet, representing short-term obligations
Amounts 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
Money owed by customers.
Amounts owed to a company by customers that it sold to on credit. Total accounts receivable are usually reduced by an allowance for doubtful accounts.
Amounts owed to the company, generally for sales that it has made.
Short-term, non-interest-bearing debts owed to a
A current asset on the balance sheet, representing short-term
Amounts due from customers for sales on open account, not evidenced
Money 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 turnover
The ratio of net credit sales to average accounts receivable, a measure of how
accounts receivable turnover ratio
A ratio computed by dividing annual
The recording of revenue when earned and expenses when
Well, frankly, accrual is not a good descriptive
A method of accounting in which profit is calculated as the difference between income when it is earned and expenses when they are incurred.
A forceful and intentional choice and application of accounting principles
All equity rate
The discount rate that reflects only the business risks of a project and abstracts from the
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
Allowance for Doubtful Accounts
An estimate of the uncollectible portion of accounts receivable
The ratio of total assets to stockholder equity.
Average accounting return
The average project earnings after taxes and depreciation divided by the average
Average age of accounts receivable
The weighted-average age of all of the firm's outstanding invoices.
Balance of Payments Accounts
A statement of a country's transactions with other countries.
Bottom-up equity management style
A management style that de-emphasizes the significance of economic
A guaranteed investment contract purchased with a single (one-shot) premium. Related:
Net result of public and private international investment and lending activities.
That part of the balance of payments accounts that records demands for and supplies of a currency arising from purchases or sales of assets.
A method of accounting in which profit is calculated as the difference between income
Cash settlement contracts
Futures 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 Estimate
A change in accounting that occurs as the result of new information
Change in Accounting Estimate
A change in the implementation of an existing accounting
Change in Accounting Principle
A change from one generally accepted accounting principle to another generally accepted accounting principle—for example, a change from capitalizing expenditures
Chart of accounts
A listing of all accounts used in the general ledger, usually sorted in
Common stock/other equity
Value of outstanding common shares at par, plus accumulated retained
A contract accounting method that recognizes contract revenue
A single centralized account into which funds collected at regional locations
Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the
Constant dollar accounting
A method for restating financial statements by reducing or
An offset to an asset account that reduces the balance of the asset account.
A term of reference describing a unit of trading for a financial or commodity future. Also, the actual
A formal written statement of the rights and obligations of each party to a transaction.
Method of accounting for sales or service agreements where completion
an external party that has been granted an outsourcing contract to produce a part or component for an entity
The month in which futures contracts may be satisfied by making or accepting a delivery.
an external party that has been granted an
Contract Work Hours and Safety Standards Act
A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
An account maintained in the general ledger that holds the balance without the detail. The detail is maintained in a subsidiary ledger.
a discipline that focuses on techniques or
Cost Accounting Standards Board (CASB)
a body established by Congress in 1970 to promulgate cost accounting
Cost of Equity
Same as the cost of common stock. Sometimes viewed as the
a contract in which the customer agrees
Creative Accounting Practices
Any and all steps used to play the financial numbers game, including
Creative Acquisition Accounting
The allocation to expense of a greater portion of the price
Cumulative Effect of a Change in Accounting Principle
The change in earnings of previous years
Cumulative Effect of Accounting Change
The change in earnings of previous years assuming
Cumulative Translation Adjustment (CTA) account
An entry in a translated balance sheet in which gains
Net flow of goods, services, and unilateral transactions (gifts) between countries.
That part of the balance of payments accounts that records demands for and supplies of a currency arising from activities that affect current income, namely imports, exports, investment income payments such as interest and dividends, and transfers such as gifts, pensions, and foreign aid.
Indicator of financial leverage. Compares assets provided by creditors to assets provided
A comparison of debt to equity in a company's capital structure.
A widely used financial statement ratio to assess the
A common term for convertible bonds because of their equity component and the
Discounting of Accounts Receivable
Short-term financing in which accounts receivable are used as collateral to secure a loan. The lender does not buy the accounts receivable but simply uses them as collateral for the loan. Also called pledging of accounts receivable.
accounts over which an individual or organization, other than the person in whose
See accrual-basis accounting.
Dual syndicate equity offering
An international equity placement where the offering is split into two
Represents ownership interest in a firm. Also the residual dollar value of a futures trading account,
Funds raised from shareholders.
Amounts contributed to the company by the owners (contributed capital) plus the residual earnings of the business (retained earnings).
Refers to one of the two basic sources of capital for a business, the
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