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Definition of Illustration
An illustration is a computer-generated spreadsheet that takes into account a number of assumptions in order to show how a specific policy might perform for a specific individual.
The change in the value of a firm's foreign currency denominated accounts due to a
Earnings of a firm as reported on its income statement.
Total liabilities exceed total assets. A firm with a negative net worth is insolvent on
The ease and quickness with which assets can be converted to cash.
Money owed to suppliers.
Money owed by customers.
The ratio of net credit sales to average accounts receivable, a measure of how
The average project earnings after taxes and depreciation divided by the average
The weighted-average age of all of the firm's outstanding invoices.
A method developed by BARRA, a consulting firm in
A conditional trading order that indicates a security may be purchased only at the designated
Net result of public and private international investment and lending activities.
Procedures followed by a firm in attempting to collect accounts receivables.
The Association for Investment Management and Research (AIMR)'s performance Presentation Standards Implementation
Related: Unsystematic risk
A single centralized account into which funds collected at regional locations
Refers to the volatility of returns on international investments caused by events associated
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.
An order to buy or sell stock that automatically expires if it can't be executed on the day it is entered.
accounts over which an individual or organization, other than the person in whose
An established guide for the firm to determine the amount of money it will pay as dividends.
Economic environment in which the firm expects to reside over the life of the
Economic order quantity (EOQ)
The order quantity that minimizes total inventory costs.
Fill or kill order
A trading order that is canceled unless executed within a designated time period.
See:diversifiable risk or unsystematic risk.
The use of government spending and taxing for the specific purpose of stabilizing the economy.
Generally Accepted Accounting Principals (GAAP)
A technical accounting term that encompasses the
Special accounts where you can save and invest, and the taxes are deferred until money
An agreement between two or more firms to share risk and financing responsibility in
Law of large numbers
The mean of a random sample approaches the mean (expected value) of the
An order to buy a stock at or below a specified price or to sell a stock at or above a specified
Limit order book
A record of unexecuted limit orders that is maintained by the specialist. These orders are
Margin account (Stocks)
A leverageable account in which stocks can be purchased for a combination of
This is an order to immediately buy or sell a security at the current trading price.
Actions taken by the Board of Governors of the Federal Reserve System to influence the
Money market demand account
An account that pays interest based on short-term interest rates.
Negotiable order of withdrawal (NOW)
Demand deposits that pay interest.
An account carried by one futures commission merchant with another futures commission
Arrangement whereby sales are made with no formal debt contract. The buyer signs a receipt,
Open (good-til-cancelled) order
An individual investor can place an order to buy or sell a security. That
When a security is expected to appreciate at a rate faster than the overall market.
Pecking-order view (of capital structure)
The argument that external financing transaction costs, especially
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
Performance attribution analysis
The decomposition of a money manager's performance results to explain
The evaluation of a manager's performance which involves, first, determining
The calculation of the return realized by a money manager over some time interval.
Shares of stock given to managers on the basis of performance as measured by earnings
Policy asset allocation
A long-term asset allocation method, in which the investor seeks to assess an
Method of accounting for a merger in which the acquirer is treated as having purchased
Regulatory accounting procedures
accounting principals required by the FHLB that allow S&Ls to elect
Retail investors, individual investors
Small investors who commit capital for their personal account.
Sell limit order
Conditional trading order that indicates that a, security may be sold at the designated price or
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
Specific issues market
The market in which dealers reverse in securities they wish to short.
A computer program that organizes numerical data into rows and columns on a terminal screen,
Statement of Financial Accounting Standards No. 8
This is a currency translation standard previously in
Statement of Financial Accounting Standards No. 52
This is the currency translation standard currently
An order to sell a stock when the price falls to a specified level.
Stop order (or stop)
An order to buy or sell at the market when a definite price is reached, either above (on a
A stop order that designates a price limit. In contrast to the stop order, which becomes a
account in which the bank takes all of the excess available funds at the close of each business
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to
Treasury tax and loan account at a bank.
When a security is expected to appreciate at a slower rate than the overall market.
Variable life insurance policy
A whole life insurance policy that provides a death benefit dependent on the
Zero-balance account (ZBA)
A checking account in which zero balance is maintained by transfers of funds
Amounts a company owes to creditors.
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.
NUMBER OF DAYS SALES IN RECEIVABLES
(also called average collection period). The number of days of net sales that are tied up in credit sales (accounts receivable) that haven’t been collected yet.
SPECIFIC INVOICE PRICES
An inventory valuation method in which a company values the items in its ending inventory based
An explanation or report in financial terms about the transactions of an organization.
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.
The representation of the double-entry system of accounting such that assets are equal to liabilities plus capital.
The period of time for which financial statements are produced – see also financial year.
Accounting rate of return (ARR)
A method of investment appraisal that measures
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.
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 method of accounting in which profit is calculated as the difference between income
The production of financial statements, primarily for those interested parties who are external to the business.
The 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.
Profit and Loss account
A financial statement measuring the profit or loss of a business – income less expenses – for an accounting period.
Strategic management accounting
The provision and analysis of management accounting data about a business and its competitors, which is of use in the development and monitoring of strategy (Simmonds).
The formula Assets = Liabilities + Equity.
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.
Amounts owed to the company, generally for sales that it has made.
Allowance for doubtful accounts
A contra account related to accounts receivable that represents the amounts that the company expects will not be collected.
An offset to an asset account that reduces the balance of the asset account.
An account that reduces an equity account. An example is Treasury stock.
An account maintained in the general ledger that holds the balance without the detail. The detail is maintained in a subsidiary ledger.
The accounts found on the Balance Sheet; these account balances are carried forward for the lifetime of the company.
A method of accounting for inventory.
The format used for a general ledger page. The name of the account is put on the top line, and a vertical line is dropped from the top line (hence the "T"). Debits are recorded on the left side, and credits are recorded on the right.
The 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.
A broad, all-inclusive term that refers to the methods and procedures
An equation that reflects the two-sided nature of a
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